Problem:

XYZ Corporation makes a single product. Below is the data concerning its operation for the month of July. Factorty overhead is applied on the 150% of direct labor cost. Two-third of the factory overhead is fixed. The total contribution margin is $1,320,000. The company has no beginning or ending inventory.

Required:

Question: What is the direct material cost Per Unit?

• Number of units sold 10,000
• Selling price per unit $300
• Manufacturing cost per unit $160
• Variable selling expenses per unit $18
• Total fixed selling expenses $54,700
• Variable admin. expenses per unit $32
• Total fixed admin. expenses $242,700

• $42
• $55
• $84
• $118
• None of the above

Note: Be sure to show how you arrived at your answer.