Ramort Company reports the following cost data for its single product. The compa

Question

Ramort Company reports the following cost data for its single product. The company regularly sells 16,000 units of its product at a price of $52.00 per unit.

5. units of its product at a price of $52.00 per unit. Direct materials Direct labor Overhead costs for the year $ 9.20 per unit S 11.20 per unit Variable overhead Fixed overhead per year S 2.20 per unit $ 14,400 Selling and adminstrative costs for the year Variable Fixed $ 1.20 per unit S64,400 Normal production level (in units) 16,000 units Compute contribution margin under variable costing. RAMORT COMPANY Contribution margin

Explanation / Answer

Sales price per unit 52 Less variable cost: Direct material 9.20 Direct labour 11.20 Variable overhead cost 2.20 Variable selling&administration cost 1.20 Total variable cost per unit 23 20 Contribution margin per unit 28.20 Contribution margin in dollars(16000×28.20) $451200

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