Question

Schwiesow Corporation has provided the following information: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Variable administrative expense Fixed selling and administrative expense Cost Cost per per Period Unit $7.05 $3.50 $1.65 $11,000 $1.00 $0.40 $ 5,500 If the selling price is $18.70 per unit, the contribution margin per unit sold is closest to: Multiple Choice o $1.80 o 0 $5.10 $5.10 o 0 $8.15 $8.15 o o $4.30

Answer 1

Question 1

Correct answer------------$5.10

Working

Sales price		$ 18.70
Less: Variable costs
Direct material	$       7.05
Direct labor	$       3.50
Variable manufacturing overhead	$       1.65
Variable selling expense	$       1.00
Variable administrative expense	$       0.40
Total variable cost per unit		$ 13.60
Contribution margin per unit		$     5.10

Question 2

Correct answer----------$12,000

Working

Units	4000
Fixed manufacturing overhead per unit	$              3.00
Total fixed cost	$   12,000.00

No matter what the production is the fixed cost in totality do not change. It will remain at $12,000 when production is 5000 units.