If a Unit Sells for $11

question 116

True/False

If a unit sells for $11.40 and has a variable cost of $3.80, its contribution margin per unit is $7.60.

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Definitions:

Job-Order Costing System

An accounting method used to assign product costs based on individual job orders, suitable for customized or unique products.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including costs related to indirect labor, materials, and factory operations.

Finishing Department

The section in a manufacturing process where products undergo final touches before being considered finished goods.

Predetermined Overhead Rate

An upfront calculated rate for assigning manufacturing overhead costs to products or job orders, based on estimated expenses and levels of activity.