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:

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding the costs directly related to producing goods or services.

Sales Revenues

The total amount of income received by a company from its sales of goods or services, before any expenses are subtracted.

Useful Life

The estimated duration of time a fixed asset is expected to be usable for its intended purpose.

Equipment

Equipment consists of the tools, machinery, and other durable assets used in the production of goods or services.