Answer the Following Questions Using the Information Below:
Coroid Manufacturers

question 209

Multiple Choice

Answer the following questions using the information below:
Coroid Manufacturers Inc. is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers:
$\begin{array}{l}\text { Variable costs: }\\\text { Direct materials } & \$ 120 \\\text { Direct labor } & 60 \\\text { Manufacturing support } & 105 \\\text { Marketing costs } & 45\\\text { Fixed costs: }\\\text { Manufacturing support } & 135 \\\text { Marketing costs } & \underline{45}\\\text { Total costs } & 510 \\\text { Markup (50\%) } & 255 \\\text { Targeted selling price } & \$ 765\end{array}$
-What is the contribution margin per unit?

• A) $170
• B) $220
• C) $435
• D) $510

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Definitions:

Current Ratio

A liquidity ratio; current assets are divided by current liabilities to indicate a company’s ability to pay its short-term debt. This ratio does not provide as much certainty as the acid test ratio.

Current Assets

Assets that can be converted into cash or used within one year or the normal operating cycle of the business, whichever is longer.

Common-Size Statements

Financial statements that are expressed as a percentage of a certain figure, allowing for easier comparison across time periods and companies by standardizing the data.

Percentage Of Change

A mathematical calculation used to determine the percentage increase or decrease of a value over a period of time.