Answered

Join the IDNLearn.com community and start exploring a world of knowledge today. Find reliable solutions to your questions quickly and accurately with help from our dedicated community of experts.

A cement manufacturer has supplied the following data:

Tons of cement produced and sold 220,000
Sales revenue $924,000
Variable manufacturing expense $297,000
Fixed manufacturing expense $280,000
Variable selling and administrative expense $165,000
Fixed selling and administrative expense $82,000
Net operating income $100,000

What is the company's unit contribution margin?

a. $4.20 per unit
b. $0.45 per unit
c. $1.90 per unit
d. $2.10 per unit

Sagot :

Abiolataiwo2015idn

Answer:

d. $2.10 per unit

Explanation:

Calculation for What is the company's unit contribution margin

First step is to calculate the Variable cost using this formula

Variable cost = Variable Manufacturing Expenses + Variable Selling & Administrative Expenses

Let plug in the formula

Variable cost = $297,000 + $165,000

Variable cost = $462,000

Second step is to calculate Total Contributiom Margin using this formula

Total Contributiom Margin=Sales – Variable Cost

Let plug in the formula

Total Contributiom Margin= $924,000 - $462,000

Total Contributiom Margin= $462,000

Now let calculate Unit Contribution Margin using this formula

Unit Contribution Margin= Total Contribution Margin/Total number produced and sold cement

Let plug in the formula

Unit Contribution Margin = $462,000 / 220,000 Unit Contribution Margin= $2.10 per unit

Therefore the Unit Contribution Margin will be $2.10 per unit

Your presence in our community is highly appreciated. Keep sharing your insights and solutions. Together, we can build a rich and valuable knowledge resource for everyone. Find clear answers at IDNLearn.com. Thanks for stopping by, and come back for more reliable solutions.