Harris Corporation produces a single product. Last year, Harris manufactured 29,

Question

Harris Corporation produces a single product. Last year, Harris manufactured 29,650 units and sold 24,600 units. Production costs for the year were as follows: Fixed manufacturing overhead $563,350 Variable manufacturing overhead $243,130 Direct labor $145,285 Direct materials $222,375 Sales were $1,070,100, for the year, variable selling and administrative expenses were $140,220, and fixed selling and administrative expenses were $210,515. 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.) $17.20 per unit $12.70 per unit $22.90 per unit $18.30 per unit

Explanation / Answer

Contribution Margin per unit Per Unit Total Selling Price per unit 43.5 1070100/24600 1070100 Variable Costs Direct Material 7.5 222375/29650 222375 Direct Labor 4.9 145285/29650 145285 Overhead 8.2 243130/29650 243130 Selling & Admin Expense 5.7 140220/24600 140220 Total Variable Cost 26.3 Contribution Margin 17.2 The correct answer is A. $ 17.2 per unit

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