Pedregon Corporation has provided the following information:Variable manufacturing overheadFixed manufacturing overheadO $5.70$8.15Sales commissionsVarlable administrative expenseFixed selling and administrative expense$5,000If the selling price is $21.60 per unit, the contribution margin per unit sold is closest to:O $3.90Direct materialsDirect laborO $10.70* PreviousCost per Unit Cost per Period$7.10$ 3.80$1.35$14,000$0.55$0.65

Contribution is an important component for a businessman to understand the amount he is getting as a…

Answered: of the selling price is $21.60 per…

Business

Accounting

of the selling price is $21.60 per unit, the contribution margi $5.70 O $8.15 $3.90

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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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

Pedregon Corporation has provided the following information:
Variable manufacturing overhead
Fixed manufacturing overhead
O $5.70
$8.15
Sales commissions
Varlable administrative expense
Fixed selling and administrative expense
$5,000
If the selling price is $21.60 per unit, the contribution margin per unit sold is closest to:
O $3.90
Direct materials
Direct labor
O $10.70
* Previous
Cost per Unit Cost per Period
$7.10
$ 3.80
$1.35
$14,000
$0.55
$0.65

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