A Division Sold 280,000 Calculators During 2020 How Much Is the Contribution Margin Per Unit, Rounded to {Sales

question 77

Multiple Choice

A division sold 280,000 calculators during 2020: $\begin{array}{llcc} \text {Sales } &&\$5,600,000\\ \text {Variable costs: } &\\ \text { Materials} &\$1,400,000\\ \text {Order processing }& 280,000&\\ \text { Billing labour} &1,120,000\\ \text { Delivery costs} &840,000\\ \text {Selling expenses } &\underline{560,000}\\ \text { Total variable costs } &&4,200,000\\ \text { Fixed costs } &&750,000\\\end{array}$
How much is the contribution margin per unit, rounded to the nearest cent?

• A)$17.32
• B)$15.00
• C)$7.00
• D)$5.00

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Definitions:

Equity Method

The Equity Method is an accounting technique used to record investments in associate companies, where the investment's carrying value is adjusted to recognize the investor's share of the associates' profits or losses.

Voting Common Stock

Shares of a company that grant the holder the right to vote on corporate matters at shareholder meetings.

Equity Method

An accounting technique used by a company to record its investments in other companies, where the investment is initially recorded at cost and subsequently adjusted to reflect the investing company's share of the investee's net income or losses.

Net Income

Net income refers to the total profit of a company after all expenses, taxes, and deductions have been subtracted from total revenue.