Princeton Fabrication, Inc., produced and sold 1,400 units of the company\'s onl

Question

Princeton Fabrication, Inc., produced and sold 1,400 units of the company's only product in March. You have collected the following information from the accounting records:

Find the following:

Variable manufacturing cost per unit

Full cost per unit

Variable cost per unit

Full absorption cost per unit

Prime cost per unit

Conversion cost per unit

Profit margin per unit

Contribution margin per unit

Gross margin per unit

Sales Price $138 Manufacturing Costs: Fixed overhead for the month 18,200 Direct labor per unit 9 Direct Materials per unit 33 Variable overhead per unit 26 Marketing and administrative costs: Fixed costs for the month 21,400 Variable costs per unit 4

Explanation / Answer

Variable manufacturing cost per unit = 33+9+26=$68 per unit

Full cost per unit =( 72*1400 + 39600) / 1400 = $100.29 per unit

Variable cost per unit = 68+4= $72 per unit

Full absorption cost per unit = (68*1400+18200) / 1400 = $81 per unit

Prime cost per unit = 9+33=$42 per unit

Conversion cost per unit = 42+26= $68 per unit

Profit margin per unit = 138 - 100.29 = $37.71 per unit

Contribution margin per unit = 138 - 72 = $66 per unit

Gross margin per unit = 138 - 68 = $70 per unit

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