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If the selling price is $20.80 per unit, the contribution margin per unit sold is closest to:

If the selling price is $20.80 per unit, the contribution margin per unit sold is closest to:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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### Pedregon Corporation Cost Analysis Pedregon Corporation has provided the following cost information: | **Cost Item** | **Cost per Unit** | **Cost per Period** | |----------------------------------------|-------------------|---------------------| | Direct materials | $6.70 | | | Direct labor | $3.80 | | | Variable manufacturing overhead | $1.50 | | | Fixed manufacturing overhead | | $15,200 | | Sales commissions | $0.70 | | | Variable administrative expense | $0.75 | | | Fixed selling and administrative expense| | $6,800 | **Note:** If the selling price is $20.80 per unit, the contribution margin per unit sold is closest to one of the options in the multiple-choice question below. ### Multiple Choice Question **Determine the contribution margin per unit:** - $3.55 - $5.00 - $7.35 - $10.30 **Instructions:** Select the option that represents the correct contribution margin per unit. Contribution margin per unit is calculated as the selling price per unit minus the variable costs per unit. Use the provided cost information to determine the appropriate figure.
Transcribed Image Text:### Pedregon Corporation Cost Analysis Pedregon Corporation has provided the following cost information: | **Cost Item** | **Cost per Unit** | **Cost per Period** | |----------------------------------------|-------------------|---------------------| | Direct materials | $6.70 | | | Direct labor | $3.80 | | | Variable manufacturing overhead | $1.50 | | | Fixed manufacturing overhead | | $15,200 | | Sales commissions | $0.70 | | | Variable administrative expense | $0.75 | | | Fixed selling and administrative expense| | $6,800 | **Note:** If the selling price is $20.80 per unit, the contribution margin per unit sold is closest to one of the options in the multiple-choice question below. ### Multiple Choice Question **Determine the contribution margin per unit:** - $3.55 - $5.00 - $7.35 - $10.30 **Instructions:** Select the option that represents the correct contribution margin per unit. Contribution margin per unit is calculated as the selling price per unit minus the variable costs per unit. Use the provided cost information to determine the appropriate figure.
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