Elfalan Corporation Produces a Single Product

question 88

Multiple Choice

Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 80,000 units per month is as follows:
The normal selling price of the product is $67.80 per unit.
An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.90 less per unit on this order than on normal sales.
Direct labor is a variable cost in this company.
-What is the contribution margin per unit on normal sales?

• A) $7.20 per unit
• B) $33.40 per unit
• C) $5.80 per unit
• D) $7.70 per unit

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