Question

2) Pedregon Corporation has provided the following information: Cost per Unit Cost per Period S 6.35 S 3.75 $ 1.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Variable administrative expense Fixed selling and administrative expense $ 15,000 0.50 $ 0.55 $ 4,500 If the selling price is $20.60 per unit, the contribution margin per unit sold is closest to A) $4.05 B) $6.00 C) $7.95 D) $10.50

Answer 1

Correct answer----(C) $7.95

Sales price		$    20.60
Less: Variable costs
Direct material	$     6.35
Direct labor	$     3.75
Variable manufacturing overheads	$     1.50
Sales commission	$     0.50
Variable admin expenses	$     0.55
Total Variable costs		$    12.65
Contribution margin		$       7.95