The income statement for Elite Manufacturing Company for the current year is as follows: Sales (15,000...
The income statement for Elite Manufacturing Company for the
current year is as follows:
| Sales (15,000 units) | $180,000 |
| Variable expenses | 100,000 |
| Contribution margin | $ 80,000 |
| Fixed expenses | 60,000 |
| Operating income | $ 20,000 |
What is the contribution margin per unit? (Note: Round answer to
two decimal places.)
a.$7.20
b.$1.20
c.$5.33
d.$6.56
Homework Answers
Answer: c. $5.33
Contribution margin per unit = Contribution margin/Number of units sold = $80000/15000 = $5.3333 = $5.33
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Whitman Company has just completed its first year of operations.
The company’s absorption costing income statement for the year
appears below:
Whitman Company
Income Statement
Sales (42,000 units
× $41.10 per unit)
$
1,726,200
Cost of goods sold
(42,000 units × $21 per unit)
882,000
Gross margin
844,200
Selling and
administrative expenses
525,000
Net operating
income
$
319,200
The company’s selling and administrative expenses consist of
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