Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 80,000 units per month is as follows: The normal selling price of the product is $67.80 per unit.
An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.90 less per unit on this order than on normal sales.
Direct labor is a variable cost in this company.
What is the contribution margin per unit on normal sales? (Round your intermediate calculations to 2 decimal places.)
A) $7.20 per unit
B) $33.40 per unit
C) $5.80 per unit
D) $7.70 per unit

Question

Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 80,000 units per month is as follows:  The normal selling price of the product is $67.80 per unit.
An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.90 less per unit on this order than on normal sales.
Direct labor is a variable cost in this company.
What is the contribution margin per unit on normal sales? (Round your intermediate calculations to 2 decimal places.)
A) $7.20 per unit 
B) $33.40 per unit 
C) $5.80 per unit 
D) $7.70 per unit

Quizplus · Accepted Answer

11eacbfc_c646_8986_8ffe_c16781943534_TB7552_00 11eacbfc_c646_8987_8ffe_2501be8ff3e4_TB7552_00

Elfalan Corporation Produces a Single Product