Harris Corporation produces a single product. Last year, Harris manufactured 30,

Question

Harris Corporation produces a single product. Last year, Harris manufactured 30, 140 units and sold 24,600 units. Production costs for the year were as follows: Sales were $1, 242,300, for the year, variable selling and administrative expenses were $140,220, and fixed selling and administrative expenses were $217,008. There was no beginning inventory. Assume that direct labor is a variable cost. The contribution margin per unit would be: $29.80 per unit $24.10 per unit $25.20 per unit $19.60 per unit

Explanation / Answer

Solution.

Calculation for contribution margin per unit.

Particular Amount Unit Per unit Sales    1,242,300.00    24,600.00               50.50 Variable MOH        223,036.00    30,140.00               (7.40) Direct labor        147,686.00    30,140.00               (4.90) Direct material        253,176.00    30,140.00               (8.40) Contribution Margin               29.80

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