FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Spartans Inc. has the following
per unit per year
Price $21.00
Direct Materials $6.00
Direct Labor $1.80
Var. MOH $0.80
Fixed MOH $36,000
Selling $2.00
Administrative $60,000
1. What is the contribution margin per unit? $8.60, $2.99, $7.59, $10.60, or $4.99
2. What is the contribution margin ratio? 0.3672, 0.6328, 0.7800, 0.2200, or 0.4415
3. Based on your answer from (b), how much of every $1.00 of sales represents variable costs?
4. If direct labor costs increase by $1.00, how will that affect the contribution margin?
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