Por Favor Company provided the following information regarding its one and only product -skateboards. $\begin{array}{ll}
\text { Direct materials used } & \$ 200,000 \
\text { Direct labor } & \$ 0,000 \
\text { Fixed overhe ad } & 100,000 \
\text { Fixed s elling and administrative costs } & 150,000\\text { Variable overhead } & 20,000 \
\text { Variable selling and administrative } & 60,000 \
\text { Selling unit price } & 75 \
\text { Units produced and sold } & 10,000
\end{array}$ is the manufacturing cost per unit if the contribution approach is used.
A) $40
B) $28
C) $30
D) $36

Question

Quizplus · Accepted Answer

The contribution approach assigns only variable costs to the product. Therefore, the manufacturing cost per unit is:Direct materials used + Direct labor + Variable overhead = $200,000 + $0 + $20,000 = $220,000Manufacturing cost per unit = $220,000 / 10,000 units = $22

Por Favor Company Provided the Following Information Regarding Its One