Calculate the Contribution Per Unit for the New Machine

question 11

Multiple Choice

Calculate the contribution per unit for the new machine

• A)£1.77.
• B)£1.75
• C)£1.57
• D)£1.39.

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Definitions:

Denominator Level

The activity level used to compute a predetermined overhead rate, often reflecting capacity or expected usage.

Budget Variance

The difference between budgeted figures for a set period and the actual figures achieved.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual level of activity.

Unfavorable

A term used in budgeting and variance analysis to describe a situation where actual costs are higher than expected or budgeted costs.