Refer to the information in QS 6-16. The company sells its product for $50 per unit. Due
Question:
Refer to the information in QS 6-16. The company sells its product for $50 per unit. Due to new regulations, the company must now incur $2 per unit of hazardous waste disposal costs and $8,500 per year of fixed hazardous waste disposal costs. Compute the contribution margin per unit, including hazardous waste disposal costs.
QS 6-16
Direct labor ...................................................... $ 2
Direct materials .................................................. 3
Variable overhead .............................................. 4
Total variable cost .............................................. 9
Fixed overhead ($50,000/10,000 units) ........... 5
Total product cost per unit ........................... $14
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
Step by Step Answer:
Managerial Accounting
ISBN: 978-1260482935
7th edition
Authors: John J Wild, Ken W. Shaw, Barbara Chiappetta