Crandle Manufacturers Inc. is approached by a potential new customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers:

What is the contribution margin per unit?
A) $220
B) $280
C) $500
D) $700

Question

Crandle Manufacturers Inc. is approached by a potential new customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers:

What is the contribution margin per unit?

What is the contribution margin per unit?
A) $220 
B) $280 
C) $500 
D) $700

Quizplus · Accepted Answer

Contribution margin per unit = $980 - ($170 + $90 + $135 + $85) = $500