Respuesta :
Therefore, option D is correct and the company's net operating income is $29,200. The company's contribution margin is $8.40.
What are product costs examples?
Product expenses include things like allotted plant overhead, direct labor costs, and raw materials. Rent, office amortization, office equipment, & utilities are a few examples of general and administrative costs. Product costs are expenses incurred to produce a good that is meant to be sold to consumers. Direct materials (DM), direct labor (DL), or manufacturing overhead are all part of the cost of the product (MOH).
What is the importance of product cost?
Setting the appropriate pricing for a particular product can assist the business in making data-driven decisions, which goes beyond simply setting a standard price. To determine a product's sales price, one must know more than just how much the corporation spends on production. The process of figuring out the expenses associated with producing a specific product is called product costing. The consumption of components and raw materials, labor costs, and overhead expenses specific to one unit are included in this overall cost.
Briefing:
1a. Variable product cost per unit = 5.75 + 1.25 + 0.60 = $7.60
b. Total variable cost per unit = 5.75 + 1.25 + 0.60 + 0.80 = $8.40
c. Contribution margin per unit = Selling price - Total Variable cost per unit
= 16 - 8.40
= $7.60
d. Contribution margin ratio = (7.6/16) × 100 = 47.5
e. Total fixed expense for the year = 43000 + 19000 = 62000
2. Price per unit. Total Sales 16= $192000
Less: variable cost 8.40. (100800)
Less: cont. marg per unit (62000)
Net operating Income = $29200
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