Dorian Company Produces and Sells a Single Product

question 15

Multiple Choice

Dorian Company produces and sells a single product. The product sells for $60 per unit and has a contribution margin ratio of 40%. The company's monthly fixed expenses are $28,800
-What is the variable expense per unit?

• A) $31.20.
• B) $24.00.
• C) $36.00.
• D) $28.80.

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Definitions:

Increasing Returns

An economic principle where a proportionate increase in inputs leads to a greater proportionate increase in outputs, typically seen in production processes.

Constant Returns

A situation in production where increasing the inputs by a certain proportion results in an increase in output by the same proportion.

Input Prices

The costs associated with the purchase of the materials, labor, and other inputs required for the production of goods or services.

Marginal Returns

The additional output gained by employing an additional unit of a resource.