Carr Company produces a single product. During the past year, Carr manufactured
ID: 2505298 • Letter: C
Question
Carr Company produces a single product. During the past year, Carr manufactured 34,250 units and sold 28,400 units. Production costs for the year were as follows: Fixed manufacturing overhead $650,750 Variable manufacturing overhead $256,875 Direct labor $140,425 Direct materials $284,275 Sales totaled $1,434,200, variable selling expenses totaled $167,560, and fixed selling and administrative expenses totaled $215,775. There were no units in beginning inventory. Assume that direct labor is a variable cost. The contribution margin per unit would be: Carr Company produces a single product. During the past year, Carr manufactured 34,250 units and sold 28,400 units. Production costs for the year were as follows:Explanation / Answer
Carr Company produces a single product. During the past year, Carr manufactured 34,250 units and sold 28,400 units. Production costs for the year were as follows:
The contribution margin per unit would be: Sales - variable Cost
Sales = 1434200/ 28400 = $ 50.50
Variable Production cost = (256875 + 140425 + 284275)/34250 = $ 19.90
Variable Selling Expenses = 167560/28400 = $ 5.90
The contribution margin per unit would be: 50.50 - 19.90 - 5.90 = $ 24.70
Fixed manufacturing overhead $650,750 Variable manufacturing overhead $256,875 Direct labor $140,425 Direct materials $284,275