HarrisCorporation produces a single product. Last year, Harris manufactured 32,1

Question

HarrisCorporation produces a single product. Last year, Harris manufactured 32,150 units and sold 26,900 units. Production costs for the year were as follows:

Sales were $1,277,750, for the year, variable selling and administrative expenses were $158,710, and fixed selling and administrative expenses were $212,190. There was no beginning inventory. Assume that direct labor is a variable cost.

The contribution margin per unit would be: (Do not round intermediate calculations.)

$20.80 per unit

$16.30 per unit

$21.90 per unit

$26.70 per unit

HarrisCorporation produces a single product. Last year, Harris manufactured 32,150 units and sold 26,900 units. Production costs for the year were as follows:

Explanation / Answer

Variable manufacturing overhead=$279,705/32,150=$8.67

Labour cost per unit=$154,320/32,150=$4.80

Material cost per unit=$234,695/32,150=$7.30

Variable selling cost per unit=$158,710/26,900=$5.90

Selling price per unit=$1,277,750/26,900=$47.50

Total Variable cost=$8.67+$4.8+$7.3+$5.90=$26.673

Contribution=$47.50-$26.673=$20.83=$20.8

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