Use the Following Information to Answer the Following Questions

question 43

Multiple Choice

Use the following information to answer the following Questions

Jayleen Company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows.

Fixed costs of $20,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same.

-The contribution margin per machine hour for Floor Deodorizer is:

• A) $0.25.
• B) $2.00.
• C) $4.00.
• D) $5.00.
• E) $20.00.

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Definitions:

Variable Costs

Costs that change in proportion to the level of production or business activity.

Full Costs

This refers to the comprehensive total amount that includes all relevant costs of production, including direct, indirect, fixed, and variable costs.

Cost of Goods Sold

The historical cost of products sold as reported in the income statement.