Carver Company Produces a Product Which Sells for $30

question 65

Multiple Choice

Carver Company produces a product which sells for $30. Variable manufacturing costs are $15 per unit. Fixed manufacturing costs are $5 per unit based on the current level of activity, and fixed selling and administrative costs are $4 per unit. A selling commission of 10% of the selling price is paid on each unit sold. The contribution margin per unit is:

• A) $3
• B) $15
• C) $8
• D) $12

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Definitions:

Economic Pie

A metaphor for the total amount of wealth or resources available in an economy that can be distributed among its participants.

Standard of Living

The extent of financial status, comfortability, worldly possessions, and essentials provided to a certain community class or area.

Total Output

The aggregate production of goods and services in an economy at a given time, typically measured as Gross Domestic Product (GDP).

Marginal Benefit

The additional satisfaction or utility gained from consuming or producing one more unit of a good or service.