Pedregon Corporation has provided the following information: Cost per UnitCost per Period Direct materials$ 6.35 Direct labor$ 3.75 Variable manufacturing overhead$ 1.50 Fixed manufacturing overhead $ 15,000 Sales commissions$ 0.50 Variable administrative expense$ 0.55 Fixed selling and administrative expense $ 4,500 If the selling price is $20.60 per unit, the contribution margin per unit sold is closest to:

$ 7.95

Explanation:

Calculation for what the contribution margin per unit sold is closest to:

Sales price$ 20.60

Less: VARIABLE COSTS

Direct material$ 6.35

Direct labor$ 3.75

Variable manufacturing overheads$ 1.50

Sales commission$ 0.50

Variable admin expenses$ 0.55

Total Variable costs$ 12.65

Contribution margin$ 7.95

($20.60-$12.65)

Therefore the the contribution margin per unit sold is closest to:$ 7.95

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