The Controller of Samson Electronics Is Evaluating the Unit Contribution

question 63

Short Answer

The controller of Samson Electronics is evaluating the unit contribution margin for the GPS receivers for the first quarter of the year. If 20 GPS receivers are produced and sold during June at a unit selling price of $100, with a fixed cost per unit of $5, and variable costs totaling $800, how much is the unit contribution margin for the each GPS receiver? a. $60
B) $100
C) $55
D) $40

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Definitions:

Straight-line Method

A method of calculating depreciation by evenly allocating the cost of an asset over its estimated useful life.

Salvage Value

The expected residual valuation of an asset at the conclusion of its operational life, commonly included in the calculations for depreciation.

Depreciation

The accounting process of allocating the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Annual Depreciation

The amount of an asset's cost that is allocated as expense across one year of its useful life, reflecting the asset's loss of value over time.