Elfalan Corporation Produces a Single Product

question 57

Multiple Choice

Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 80,000 units per month is as follows: The normal selling price of the product is $67.80 per unit.
An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.90 less per unit on this order than on normal sales.
Direct labor is a variable cost in this company.
What is the contribution margin per unit on normal sales? (Round your intermediate calculations to 2 decimal places.)

• A) $7.20 per unit
• B) $33.40 per unit
• C) $5.80 per unit
• D) $7.70 per unit

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Definitions:

Occipital Lobe

The region located at the back of the brain that is responsible for processing visual information.

Brain Tumor

An abnormal growth of cells within the brain that can be cancerous (malignant) or non-cancerous (benign).

Vision

The ability to perceive the environment through light in the visible spectrum reflected by objects, processed by the eyes and interpreted by the brain.

Nerve Tissue

Specialized tissue that makes up the nervous system, transmitting signals between the brain and other parts of the body.