Tirri Corporation has provided the following information: Cost per UnitCost per Period Direct materials$7.35 Direct labor$3.55 Variable manufacturing overhead$1.40 Fixed manufacturing overhead $24,100 Sales commissions$1.15 Variable administrative expense$0.70 Fixed selling and administrative expense $8,500 If the selling price is $27.80 per unit, the contribution margin per unit sold is closest to: Multiple Choice $13.65 $6.80 $16.90 $10.60

Question

Business

Ellie Stuart

1 March, 23:51

Tirri Corporation has provided the following information: Cost per UnitCost per Period Direct materials$7.35 Direct labor$3.55 Variable manufacturing overhead$1.40 Fixed manufacturing overhead $24,100 Sales commissions$1.15 Variable administrative expense$0.70 Fixed selling and administrative expense $8,500 If the selling price is $27.80 per unit, the contribution margin per unit sold is closest to: Multiple Choice $13.65 $6.80 $16.90 $10.60

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Answers (1)

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Brooklynn Garrison · Answer 1

The correct answer is A.

Explanation:

Giving the following information:

Direct materials = $7.35

Direct labor = $3.55

Variable manufacturing overhead = $1.40

Sales commissions = $1.15

Variable administrative expense = $0.70

The selling price is $27.80

The contribution margin is the result of deducting from the selling price all the variable cost components.

Contribution margin = selling price - (direct material + direct labor + variable overhead + sales comission + variable administrative expense)

Contribution margin = 27.8 - 14.15 = $13.65