Question

Columbia Products produced and sold 1,200 units of the company's only product in March. You have collected the following information from the accounting records: $ 125 14,400 Sales price (per unit) Manufacturing costs: Fixed overhead (for the month) Direct labor (per unit) Direct materials (per unit) Variable overhead (per unit) Marketing and administrative costs: Fixed costs (for the month) Variable costs (per unit) 33 23 20,400 Required: a. Compute the following: 1. 4. 5. Variable manufacturing cost per unit. Full cost per unit Variable cost per unit. Full absorption cost per unit. Prime cost per unit. Conversion cost per unit. Profit margin per unit. Contribution margin per unit. Gross margin per unit 6. 8. 9.

Answer 1

1)	Varibale Manufacturing Cost Per unit
	Direct Material		$          33
	Direct Labor		$             9
	Variable Overhead per unit		23
	Total		$          65
2)	Full cost per unit
	Direct Material		$          33
	Direct Labor		$             9
	Variable Overhead per unit		23
	Fixed Mgf Overhead		12
	($14400/1200)
	Marketing And Admin Variable Overhead		$             3
	Marketing And Admin Fixed Overhead		$          17
	($20400/1200)
	Total Full Cost Per unit		$    97.00
3)	Variable Cost Per unit
	Direct Material		$          33
	Direct Labor		$             9
	Variable Overhead per unit		23
	Marketing And Admin Variable Overhead		$             3
	Variable Cost per unit		$          68
4)	Full Absorption Cost Per Unit
	Direct Material		$          33
	Direct Labor		$             9
	Variable Overhead per unit		$          23
	Fixed Mgf Overhead		$          12
	($14400/1200)
	Total		$          77
5)	Prime Cost Per unit
	Direct Material		$          33
	Direct Labor		$             9
	Total		$          42
6)	Conversion Cost Per Unit
	Direct Labor		$             9
	Variable Overhead per unit		23
	Fixed Mgf Overhead		$          12
	($14400/1200)
	Total		$          44
7)	Profit Margin Per unit
	Sales Price		$        125
	Less:
	Full Cost		$    97.00
	Profit Margin		$    28.00
8)	Contribution margin per unit
	Sales Price		$        125
	Less:
	Direct Material		$          33
	Direct Labor		$             9
	Variable Overhead per unit		$          23
	Marketing And Admin Variable Overhead		$             3
	Contribution Margin		$          57
9)	Gross Margin
	Sales Price		$        125
	Less:
	Direct Material		$          33
	Direct Labor		$             9
	Variable Overhead per unit		$          23
	Fixed Mgf Overhead		$          12
	($14400/1200)
	Gross Margin Per unit		$          48