What Is the Contribution Margin for Division a If It

question 43

Multiple Choice

What is the contribution margin for Division A if it transfers 25,000 units to Division B at $6.75 per unit?

• A)$250,000
• B)$650,000
• C)$675,000
• D)$698,750

---

Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (or standard) variable overhead based on the actual level of activity.

Variable Overhead

Costs that fluctuate with production output levels, such as utilities or indirect materials, but are not directly tied to specific units produced.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs and the standard variable overhead costs allocated based on a predetermined rate.

Indirect Labor

The wages paid to employees who are not directly involved in producing goods but support those who are, such as maintenance workers and supervisors.