| The following information relates to Clyde Corporation which produced and sold 46,000 units last month. |
| Sales | $1,104,000 |
| Manufacturing costs: | |
| Fixed | $210,000 |
| Variable | $139,400 |
| Selling and administrative: | |
| Fixed | $300,000 |
| Variable | $ 44,600 |
| There were no beginning or ending inventories. Production and sales next month are expected to be 36,000 units. The company’s unit contribution margin next month should be: (Round your intermediate calculations and final answer to 2 decimal places) |
$3.40
$8.58
$20.00
$23.60
Answer:
Contribution margin per Units= $ 20
Working notes for the above answer is as under
Variable expenses per unit = Variable expenses ÷ Quantity sold
= ($139400+44600) ÷ 59,000 units
= $271,400 ÷ 59,000 units
= $4 per unit
| Variable | Amount t in $ |
| Manufacturing costs: | 139400 |
| Selling and administrative: | 44600 |
| Toatl | 184000 |
| Divided By units produced | 46000 |
| 184000/46000 | 4 |
Selling price per unit
= Sales ÷ Quantity sold
= $1104000 ÷ 46,000 units
= $24.00 per unit
Unit CM
= Selling price per unit – Variable expenses per unit
= $24.00 per unit – $4. per unit
= $20 per unit
