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The following cost information pertained to the Violin Division of Stringing Music Co. and was based on monthly demand and sales of 100 units: Per-Unit
The following cost information pertained to the Violin Division of Stringing Music Co. and was based on monthly demand and sales of 100 units:
Per-Unit Costs | |||||||||||||||||||||
Variable production costs: | |||||||||||||||||||||
Direct materials | $ | 170 | |||||||||||||||||||
Direct labor | 200 | ||||||||||||||||||||
Variable factory overhead | 110 | ||||||||||||||||||||
Fixed production costs: | |||||||||||||||||||||
Depreciation (equipment) | 70 | ||||||||||||||||||||
Factory rent | 98 | ||||||||||||||||||||
Other | 22 | ||||||||||||||||||||
Total production cost | $ | 670 | |||||||||||||||||||
Variable selling & administrative costs | $ | 34 | per unit | ||||||||||||||||||
Fixed selling & administrative costs | $ | 46 | per unit | ||||||||||||||||||
Given a normal selling price per unit of $800, what is the contribution margin per unit sold for recurring (i.e., normal) sales?
Multiple Choice
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$486.
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$466.
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$426.
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$286.
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$630.
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