Hawk Company provided the following information regarding its only product--skateboards. $\begin{array}{lr}
\text { Direct materials used } & \$ 375,000 \
\text { Direct labor } & 170,000 \
\text { Fixed overhead } & 95,000 \
\text { Variable overhead } & 20,000 \
\text { Variable selling and administrative } & 55,000 \\
\text { Units produced and sold } & 40,000
\end{array}$ The manufacturing cost per unit, if the contribution approach is used, is _____.
A)$13.00
B)$14.13
C)$14.75
D)$15.50

Question

Quizplus · Accepted Answer

The manufacturing cost per unit using the contribution approach includes direct materials, direct labor, fixed overhead, and variable overhead. It does not include variable selling and administrative expenses. The total manufacturing cost is calculated as the sum of direct materials ($375,000), direct labor ($170,000), fixed overhead ($95,000), and variable overhead ($20,000), which equals $660,000. Dividing this total by the units produced and sold (40,000) gives a manufacturing cost per unit of $16.50. However, there seems to be a mistake in my calculation as none of the options match. Correctly, the manufacturing cost per unit is calculated as follows: $$ \frac{\$375,000 + \$170,000 + \$95,000 + \$20,000}{40,000} = \frac{\$660,000}{40,000} = \$16.50. $$ Given the options provided, it appears there was an error in my initial explanation, as none of the options match the correct calculation. The correct approach to find the manufacturing cost per unit is to add direct materials, direct labor, and both fixed and variable overhead costs, then divide by the number of units produced and sold. However, without the correct option listed, an accurate selection cannot be made based on the provided calculation. The correct answer should reflect the sum of these costs divided by the units produced and sold, which mistakenly was not matched with the provided options.

Hawk Company Provided the Following Information Regarding Its Only Product--Skateboards