The Controller of Samson Electronics Is Evaluating the Unit Contribution

question 34

Multiple Choice

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:

Bad Debts Expense

An expense account reflecting the cost of receivables that a company is unable to collect, considered a cost of doing business.

Accounts Receivable

Represents money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Bad Debts Recovered

The unexpected receipt of payment on accounts previously written off as bad debts, leading to an income entry in the financial statements.

Accounts Receivable

Reflects the funds that a business is entitled to receive from purchasers for transactions on credit.