4 Harris Company produces a single product. Last year, Harris manufactured 17,000 units and sold 13,000 units. Production costs for the year were as follows: $ Direct materials 153,000 Direct labour 110,500 Variable manufacturing overhead 204,000 Fixed manufacturing overhead 255,000 Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and fixed selling and administrative expenses were $170,000. There was no beginning inventory. Assume that direct labour is a variable cost. The contribution margin per unit was: (a) (b) (c) (d) $25.70 $27.30 $32.50 None of the above. S Which of the following is true regarding the contribution margin ratio of a single product company? (a) As fixed expenses decrease, the contribution margin ratio increases. (b) The contribution margin ratio multiplied by the variable expense per unit equals the contribution margin per unit. (c) If sales increase, the dollar increase in net operating income can be computed by multiplying the contribution margin ratio by the dollar increase in sales. (d) The contribution margin ratio increases as the number of units sold increases. 6 The margin of safety is equal to: (a) Sales - Net operating income (b) Sales -(Variable expenses/Contribution margin) (c) Sales - (Fixed expenses / Contribution margin ratio) (d) Sales -(Variable expenses + Fixed expenses)