Harris Corporation produces a single product. Last year, Harris manufactured 33,

Question

Harris Corporation produces a single product. Last year, Harris manufactured 33,100 units and sold 27,800 units. Production costs for the year were as follows: Fixed manufacturing overhead $595,800 Variable manufacturing overhead $274,730 Direct labor $145,640 Direct materials $248,250 Sales were $1,320,500, for the year, variable selling and administrative expenses were $164,020, and fixed selling and administrative expenses were $205,220. There was no beginning inventory. Assume that direct labor is a variable cost. The contribution margin per unit would be: (Do not round intermediate calculations.)

Explanation / Answer

Sale price $47.50 ($1,320,500/27,800 units sold) Less: Variable Expenses Direct Material $7.50 ($248,250/33,100 units produced) Direct Labor $4.40 ($145,640/33,100 units produced) Variable Manufacturing Overhead $8.30 ($274,730/33,100 units produced) Variable Selling expenses $5.90 ($164,020/27,800 units sold) Total variable expenses $26.10 Contribution margin per unit $21.40

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