Morrisroe Corporation has provided the following information:??Cost per UnitCost per Period?Direct materials$6.65??Direct labor$3.30??Variable manufacturing overhead$1.70??Fixed manufacturing overhead?$10,000?Sales commissions$1.00??Variable administrative expense$0.50??Fixed selling and administrative expense?$5,000Required:a. If the selling price is $25.90 per unit, what is the contribution margin per unit sold?b. What incremental manufacturing cost will the company incur if it increases production from 5,000 to 5,001 units?

What will be an ideal response?

a.

?Selling price per unit?$25.90
?Direct materials$6.65?
?Direct labor3.30?
?Variable manufacturing overhead1.70?
?Sales commissions1.00?
?Variable administrative expense0.50?
?Variable cost per unit sold?13.15
?Contribution margin per unit?$12.75

b.
?Direct materials$6.65
?Direct labor3.30
?Variable manufacturing overhead1.70
?Incremental manufacturing cost$11.65

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