Makwa Industries has developed two new products but has only enough plant capacity to introduce one product during the current year.The following data will assist management in deciding which product should be selected.Makwa's fixed overhead includes rent and utilities,equipment depreciation,and supervisory salaries.Selling and administrative expenses are not allocated to individual products. The difference between the $100 estimated selling price for Product W and its total cost of $88 represents
A)Contribution margin per unit.
B)Gross margin per unit.
C)Variable cost per unit.
D)Operating profit per unit.

Question

Makwa Industries has developed two new products but has only enough plant capacity to introduce one product during the current year.The following data will assist management in deciding which product should be selected.Makwa's fixed overhead includes rent and utilities,equipment depreciation,and supervisory salaries.Selling and administrative expenses are not allocated to individual products.  The difference between the $100 estimated selling price for Product W and its total cost of $88 represents
A)Contribution margin per unit. 
B)Gross margin per unit. 
C)Variable cost per unit. 
D)Operating profit per unit.

Quizplus · Accepted Answer

The Answer of Makwa Industries has developed two new products but has only enough plant capacity to introduce one product during the current year.The following data will assist management in deciding which product should be selected.Makwa's fixed overhead includes rent and utilities,equipment depreciation,and supervisory salaries.Selling and administrative expenses are not allocated to individual products.  The difference between the $100 estimated selling price for Product W and its total cost of $88 represents
A)Contribution margin per unit. 
B)Gross margin per unit. 
C)Variable cost per unit. 
D)Operating profit per unit.

Makwa Industries Has Developed Two New Products but Has Only