Pedregon Corporation has provided the following information: If the selling price is $20.60 per unit, the contribution margin per unit sold is closest to:

A) $4.05
B) $6.00
C) $7.95
D) $10.50

Question

Pedregon Corporation has provided the following information:   If the selling price is $20.60 per unit, the contribution margin per unit sold is closest to:A)  $4.05B)  $6.00C)  $7.95D)  $10.50

Franz Lumandas · Accepted Answer

Final Answer : C, Explanation :  To calculate the contribution margin per unit, we need to subtract the variable expenses from the selling price.Contribution Margin per Unit = Selling Price - Variable Expenses per UnitFrom the given information:Variable Expenses per Unit = Direct Materials per Unit + Direct Labor per Unit + Variable Overhead per UnitVariable Expenses per Unit = $4.50 + $5.40 + $3.75 = $13.65Contribution Margin per Unit = $20.60 - $13.65 = $6.95Therefore, the closest answer choice is C) $7.95.

Pedregon Corporation has provided the following information: If the selling price is $20.60 per unit, the contribution margin per unit sold is closest to:

A) $4.05
B) $6.00
C) $7.95
D) $10.50

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