instructions thelp Chapter 7 Homework Question 4 (of 7 Save & Exit Subm 0.50 poi

Question

instructions thelp Chapter 7 Homework Question 4 (of 7 Save & Exit Subm 0.50 points Eley Corpor stion produces a single product The cost of producing and seling a single unit of this product at the compiny's normal activity level of 40,000 units per month is as folows Direct labor Variable mandfacturing overhead Fixed manufactuing overhead wou seling & administrat ve expense Flxed selling & adminintrative expense $ 80 s 269 % s 87 The normal seling price of the product is $1016 per unit An order has been received from an overseas customer for 1200 units to be delivered this month at a special discounted price. This order would not change the sotal amount of the company's fixed costs. The variable selling and administrative expense would be $0.8 less per unt on this order than on normal sales Direct labor is a variable cost in this company What is the cohtribution margin per unit on normal sales O $4100 O s8 30 O $9.20 O s750 References Multiple Choice Oifficulty 2 Medium Learning Objective 07-04 Prepare an anslysis showing whether a special order should be accepted

Explanation / Answer

SOLUTION

Contribution margin = $41.00

Contribution margin = Sales price - Variable costs

Variable costs = Direct material + Direct Labor + Variable manufacturing overhead + Variable selling and admn. expense

= $50.3 + $8.0 + $0.9 + $1.4 = $60.60

Contribution margin = $101.60 - $60.60

= $41.00

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.