Saturday, September 10, 2011

What is the contribution margin per unit?

ACCOUNTING

Multiple Choice

Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch Manufacturing has excess capacity. The following per unit data apply for sales to regular customers:

Variable costs:

Direct materials $40

Direct labor 20

Manufacturing support 35

Marketing costs 15

Fixed costs:

Manufacturing support 45

Marketing costs 15

Total costs 170

Markup (50%) 85

Targeted selling price $255



What is the contribution margin per unit?

a. $85

b. $110

c. $145

d. $255


Click here for the SOLUTION

No comments:

Post a Comment