Carr Company produces a single product. During the past year, Carr manufactured
ID: 2378603 • Letter: C
Question
Carr Company produces a single product. During the past year, Carr manufactured 30,030 units and sold 24,700 units. Production costs for the year were as follows:Fixed manufacturing overhead $420,420 Variable manufacturing overhead $237,237 Direct labor $126,126 Direct materials $243,243
Sales totaled $1,272,050, variable selling expenses totaled $133,380, and fixed selling and administrative expenses totaled $195,195. There were no units in beginning inventory. Assume that direct labor is a variable cost. The contribution margin per unit would be: (Do not round intermediate calculations.) $21.40 $27.20 $25.90 $31.30 $21.40 $27.20 $25.90 $31.30 Carr Company produces a single product. During the past year, Carr manufactured 30,030 units and sold 24,700 units. Production costs for the year were as follows:
Explanation / Answer
Hi,
Please find the answer as follows:
Total Variable Cost for 27400 Units = (237237 + 126126 + 243243)*24700/30030 + 133380 = 632320
Total Contribution = 1272050 - 632320 = 639730
Contribution Per Unit = 639730/24700 = 25.9
Answer is 25.9
Thanks.