Question

A cement manufacturer has supplied the following data:

Tons of cement produced and sold		268,000
Sales revenue	$	1,098,800
Variable manufacturing expense	$	437,000
Fixed manufacturing expense	$	234,000
Variable selling and administrative expense	$	99,000
Fixed selling and administrative expense	$	224,000
Net operating income	$	104,800

What is the company's unit contribution margin? (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

$2.00 per unit

$0.12 per unit

$4.10 per unit

$2.10 per unit

Answer 1

Contributing margin = (Sales revenue - variable cost)/ Units of cement produced

                                      = (1098800 – 437000 – 99000)/ 268000

                                      = (562800)/ 268000

                                       = $2.1/ Unit

So the correct answer is D.