Ask Question
24 June, 11:17

Suppose that Larimer Company sells a product for $24. Unit costs are as follows:

Direct materials $4.98

Direct labor 2.10

Variable factory overhead 1.00

Variable selling and administrative expense 2.00

Total fixed factory overhead is $26,500 per year, and total fixed selling and administrative expense is $15,260.

Calculate the variable cost per unit and the contribution margin per unit.

+2
Answers (1)
  1. 24 June, 13:43
    0
    Unitary variable cost = $8.08

    Contribution margin = $15.92

    Explanation:

    Giving the following information:

    Direct materials $4.98

    Direct labor 2.10

    Variable factory overhead 1.00

    The variable cost per unit is the sum of direct material, direct labor, and variable overhead.

    Unitary variable cost = 4.98 + 2.1 + 1 = $8.08

    The contribution margin per unit is the difference between the selling price and the unitary variable cost:

    Contribution margin = 24 - 8.08 = $15.92
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Suppose that Larimer Company sells a product for $24. Unit costs are as follows: Direct materials $4.98 Direct labor 2.10 Variable factory ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers