Eley Corporation Produces a Single Product

question 136

Multiple Choice

Eley 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 40, 000 units per month is as follows: The normal selling price of the product is $86.10 per unit. An order has been received from an overseas customer for 2, 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 $1.20 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)$32.50
• B)$8.40
• C)$9.70
• D)$7.20

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Definitions:

Skeletal

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Investigating the tiny anatomical details of tissues.