Younes Inc. manufactures industrial components. One of its products, which is used in the construction of industrial air conditioners, is known as P06. Data concerning this product are given below: Per UnitSelling price$220Direct materials$38Direct labor$1Variable manufacturing overhead$8Fixed manufacturing overhead$16Variable selling expense$4Fixed selling and administrative expense$16The above per unit data are based on annual production of 4,000 units of the component. Assume that direct labor is a variable cost.What is the current contribution margin per unit for component P06 based on its selling price of $220 and its annual production of 4,000 units?
A. $173 per unit
B. $169 per unit
C. $51 per unit
D. $137 per unit
Answer: B
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