QUESTION 2 Pedregon Corporation has provided the following i

QUESTION 2 Pedregon Corporation has provided the following information: Cost per Cost per Period Unit $6.35 $ 3.75 $1.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Variable administrative expense Fixed selling and administrative expense $ 15,000 $ 0.50 0.55 $4,500 If the selling price is $20.60 per unit, the contribution margin per unit sold is closest to: o $4.05 $10.50 $6.00 $7.95

Solution

Total variable costs=(6.35+3.75+1.5+0.5+0.55)

=$12.65

Contribution margin=Sales- variable costs

Which is equal to

=(20.6-12.65)

=$7.95