A company that makes organic fertilizer has applied the following data: Bags pro

Question

A company that makes organic fertilizer has applied the following data:
Bags produce and sold 200,000 Sales Revenue $1,560,000 Variables manufacturing expense $660,000 Fixed manufacturing expense $448,000 Variable selling and administrative expense $180,000 Fixed selling and administrative expense $214,000 Net operating income $58,000
The company’s unit contribution margin is closest to: Ce Secure I https//newconnect mbeducat nnect html Examination for Chapters 15 A company that makes organic fertilizer has supplied the following data: 23 Bags produced and sold 288,860 $1,568,800 $ 660,680 5 448,000 $ 188,800 s 214,e0e $58,800 020z29) Variable manufacturing expense Fixed manufacturing expense Variable selling and administrative expense Fixed selling and administrative expense Net operating income The company's unit contribution margin is closest to: Multiple Choice $4.50 per unit $6.90 per unit

Explanation / Answer

Answer:-The company’s unit contribution margin is closest to $3.6 per unit.

Explanation:-Selling price per unit-Variable cost per unit

                            =$7.8 per unit-$4.2 per unit =$3.6 per unit

Selling price per unit=Sales revenue/No. of bags sold

                                   =$1560000/200000 bags =$7.8 per bag

Variable cost per unit=Total variable expenses/No. of units

                                   =$840000/200000 units =$4.2 per bag

Total variable expenses= Variables manufacturing expense+ Variable selling and administrative expense

=$660000+$180000 =$840000

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