Benjemin Company had the following results of operations for the past year Sales

Question

Benjemin Company had the following results of operations for the past year Sales (16,000 units at $10.35 Direct material and direct labor Overhend 120% variablel Selling and administrative expenses (all fixed) opeeating cone 153, 600 101,600 21,600 32,700 (153,900 5 .70a A fareign compeny whoe saies wll not effect Denjsmin's market oers to buy 4200 uns $8 27 per unit in add tion to vawrabie manufechuring costs, selting nese unts wouid incease twed overheed y $670 and seling and dinstoive costs tby $370 Assuming Bercamin nas evcess capecty and acceps the ofle ts prons Muipe Choice

Explanation / Answer

Total variable cost per unit = [$ 101,600 + $ 21,600 x 20 %] / 16,000 = $ 6.62.

Contribution margin on the special order = $ 8.27 - $ 6.62 = $ 1.65

Total Contribution Margin on the special order = $ 1.65 x 4,700 = $ 7,755.

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