? laSearch ??@ 5/10 Total points awarded Help Exle Rocky Mountain Botting Compan

Question

? laSearch ??@ 5/10 Total points awarded Help Exle Rocky Mountain Botting Company produces a soft drink that 's sold for a dolla. At production and sales of 1,000,000 units, the company pays $500,000 in production costs, half of which are fixed costs. At that volume, general, selling, and administrative costs amount to $200,000 of which $50,000 are fixed costs. What is the amount of contribution margin per unit? Multiple Choice $0.60 soxo $0.30 ?Ne-ofthese s conect. ?Prev 100t 101? MacBook Pro 20 3 5 8 0

Explanation / Answer

Selling price of the product=1$

No of units sold=1000000

Production costs=500000,out of that $250000is fixed and $250000 is variable

So variable production cost per unit=250000/1000000=$0.25/unit

General selling and administrative cost=$200000,out of which $50000 is fixed that means $150000 is variable

That means variable General selling and administrative cost/unit=150000/1000000=$0.15/unit.

So,contribution margin per unit=Selling price per unit-variable cost per unit(i.e. both production and selling and adminnistartive expenses )

=$1-.0.25-0.15

=$0.60/unit

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