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QUESTION 9
The accounting records for DeSales Manufacturing Inc. included the cost information as follows which relates to its first year of operations:
Direct materials
Direct labor
Fixed manufacturing overhead
Variable manufacturing overhead
$ 60,000
$ 80,000
$ 100,000
$ 20,000
10 points
Assume the company produced 10,000 units of inventory and sold 6,000 of these units during the year for $192,000. Under variable costing, what is the contribution
margin for the year? (Ignore selling and administrative expenses.)
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Cost per unit under variable costing
60,000+80,000+20,000=160,000
Units produced: 10,000
Variable cost per unit 160,000/10,000
=16