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Question

Pedregon Corporation has provided the following information:


 

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  Cost per Unit Cost per Period

Direct materials $ 6.40  

Direct labor $ 3.20  

Variable manufacturing overhead $ 1.20  

Fixed manufacturing overhead $ 14,400

Sales commissions $ 0.40  

Variable administrative expense $ 0.45  

Fixed selling and administrative expense $ 3,300

 


If the selling price is $20.20 per unit, the contribution margin per unit sold is closest to:

A) $5.35 B) $6.20 C) $8.55 D) $10.60

Please explain correct answer.

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