The following information relates to the production cost of product PX 244. What is the contribution per unit of PX 244?
A) $9
B) $25
C) $37
D) $43

Question

The following information relates to the production cost of product PX 244.  What is the contribution per unit of PX 244?
A) $9 
B) $25 
C) $37 
D) $43

Quizplus · Accepted Answer

Contribution per unit is calculated by subtracting the variable cost from the selling price.

Contribution per unit = Selling price - Variable cost

From the given information, we can calculate:

Variable cost per unit = Direct material cost + Direct labor cost + Variable manufacturing overhead

Variable cost per unit = $30 + $10 + $6 = $46

Selling price per unit = $71

Contribution per unit = $71 - $46 = $25

Therefore, the answer is B.

The Following Information Relates to the Production Cost of Product