Use this information to answer the next two questions.

During the first month of operations, the company incurred the following total costs:

(Total production costs to manufacture 10 units)

Direct materials. $90

Direct labor. 120

Variable factory overhead 140

Fixed factory overhead 50

Selling expenses:

variable selling expenses $65

Fixed selling expenses $25

1. A) If 8 units are sold for $400, what is the contribution margin? a. $120, b. $(50), c. $55, d. $100

B) What is the cost of goods sold per unit of absorption costing? a. $37.50, b. $40.00, c. $35.00, d. $26.00