Vegas Company has the following unit costs:
Variable manufacturing overhead | $ | 25 | |
Direct materials | 20 | ||
Direct labor | 19 | ||
Fixed manufacturing overhead | 12 | ||
Variable marketing and administrative | 7 | ||
Vegas produced and sold 10,000 units. If the product sells for
$100, what is the contribution margin?
A. $360,000
B. $240,000
C. $290,000
D. $170,000
Total variable cost per unit=Direct materials+Direct labor+Variable manufacturing overhead+Variable marketing and administrative
=(20+19+25+7)=$71 per unit
Hence contribution margin=Sale-Variable cost
=(100-71)=$29 per unit
=($29*10,000)
=$290,000.
Vegas Company has the following unit costs: Variable manufacturing overhead $ 25 Direct materials 20...
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