Question: How to solve for contribution margin per unit? Glocker Company makes three products in a single facility. These products have the following unit product costs:
How to solve for contribution margin per unit?
| Glocker Company makes three products in a single facility. These products have the following unit product costs: |
| Product | |||||||||
| A | B | C | |||||||
| Direct materials | $ | 33.90 | $ | 50.40 | $ | 56.80 | |||
| Direct labor | $ | 21.30 | $ | 23.90 | $ | 14.70 | |||
| Variable manufacturing overhead | $ | 2.30 | $ | 1.70 | $ | 0.40 | |||
| Fixed manufacturing overhead | 6.40 | 4.00 | 4.60 | ||||||
| Unit product cost | $63.90 | $80.00 | $76.50 | ||||||
| Additional data concerning these products are listed below. | |||||||||
| Mixing minutes per unit | 1.10 | 0.70 | 0.20 | ||||||
| Selling price per unit | $ | 69.00 | $ | 91.40 | $ | 84.90 | |||
| Variable selling cost per unit | $ | 1.70 | $ | 2.20 | $ | 2.00 | |||
| Monthly demand in units | 3,100 | 4,400 | 2,400 | ||||||
| The mixing machines are potentially the constraint in the production facility. A total of 6,870 minutes are available per month on these machines. Direct labor is a variable cost in this company. |
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