5 ! Required information [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $ 7.00 $ 4.50 $ 1.40 $ 4.00 $ 4.00 $ 2.10 Contribution margin per unit $ 1.10 $ 0.55 13. If the selling price is $23.00 per unit, what is the contribution margin per unit? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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5
Required information
[The following information applies to the questions displayed below.]
Martinez Company's relevant range of production is 7,500 units to
12,500 units. When it produces and sells 10,000 units, its average
costs per unit are as follows:
2
Direct materials.
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Fixed selling expense
Fixed administrative expense
Sales commissions
Variable administrative expense
Contribution margin per unit
13. If the selling price is $23.00 per unit, what is the contribution margin per unit? (Do
not round intermediate calculations. Round your answer to 2 decimal places.)
Okay
3
4
5
6
Average Cost
per Unit
7
$7.00
$ 4.50
$ 1.40
$ 4.00
$ 4.00
$ 2.10
$ 1.10
$ 0.55
You
8
9
0
de
Transcribed Image Text:5 Required information [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: 2 Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Contribution margin per unit 13. If the selling price is $23.00 per unit, what is the contribution margin per unit? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Okay 3 4 5 6 Average Cost per Unit 7 $7.00 $ 4.50 $ 1.40 $ 4.00 $ 4.00 $ 2.10 $ 1.10 $ 0.55 You 8 9 0 de
Expert Solution
Step 1

Variable Cost :— It is the cost that changes with change in units. It depends on the units. It is always constant in per unit for all flexible units.

 

Sales Price per unit :— It is the sale price of one product. 

 

Contribution Margin Per Unit :— It is the difference of Sales Price per unit and variable cost per unit.

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