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
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