8.) Harris Corporation produces a single product. Last year, Harris manufactured

Question

8.) Harris Corporation produces a single product. Last year, Harris manufactured 33,910 units and sold 28,100 units. Production costs for the year were as follows:

  Fixed manufacturing overhead

$474,740

  Variable manufacturing overhead

$284,844

  Direct labor

$176,332

  Direct materials

$247,543

Sales were $1,405,000, for the year, variable selling and administrative expenses were $148,930, and fixed selling and administrative expenses were $247,543. 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.)

A. $24.90 per unit

B. $23.80 per unit

C. $29.10 per unit

D. $19.30 per unit

9.) A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

Selling price

$89

Units in beginning inventory

0

Units produced

4,300

Units sold

4,000

Units in ending inventory

300

Variable costs per unit:

    Direct materials

$13

    Direct labor

$35

   Variable manufacturing overhead

$1

   Variable selling and administrative

$10

Fixed costs:

   Fixed manufacturing overhead

$77,400

   Fixed selling and administrative

$24,000

The total contribution margin for the month under variable costing is:

A. $160,000

B. $88,000

C. $42,600

D. $120,000

8.) Harris Corporation produces a single product. Last year, Harris manufactured 33,910 units and sold 28,100 units. Production costs for the year were as follows:

Explanation / Answer

8. Variable manufacturing cost on 33910 units produced = 284844 + 176332 + 247543 = $708719

Variable manufacturing cost p.u. = 708719/33910 = $20.90

Variable manufacturing cost on 28100 units sold = 20.90 x 28100 = $587290

Variable selling expenses on 28100 units = $148930

Total Variable expenses = 587290 + 148930 = $736220

Contribution margin per unit = (Sales - Variable cost) / Units sold = (1405000 - 736220) / 28100 = $23.80

9. Contribution p.u = Selling price - Variable expenses = 89-13-35-1-10 = $30

Total contribution margin = Contribution p.u. x No. of units sold = $30 x 4000 units = $120000

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