Compute the contribution margin per unit sold


Question: Macy Corporation's relevant range of activity is 6,300 units to 13,500 units. When it produces and sells 9,900 units, its average costs per unit are as follows:

Average Cost per Unit

Direct materials $5.20

Direct labor $3.65

Variable manufacturing overhead $1.65

Fixed manufacturing overhead $2.90

Fixed selling expense $0.95

Fixed administrative expense $0.65

Sales commissions $0.90

Variable administrative expense $0.55

If the selling price is $29.00 per unit, compute the contribution margin per unit sold?

a) $10.50

b) $6.70

c) $20.15

d) $17.05

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Accounting Basics: Compute the contribution margin per unit sold
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