The following cost information pertained to the Violin Division of Stringing Music Co. and was based on monthly demand and sales of 200 units: Per-Unit Costs Variable production costs: Direct materials $170 Direct labor 155 Variable factory overhead 75 Fixed production costs: Depreciation (equipment) 15 Factory rent 58 Other 15 Total production cost $488 Variable selling

The contribution margin per unit is the difference between the selling price per unit and the total variable costs (production and selling) per unit.

Data and Calculations:

Monthly demand and sales = 200 units

Per-Unit Costs

Variable production costs:

Direct materials $170

Direct labor 155

Variable factory overhead 75

Fixed production costs:

Depreciation (equipment) 15

Factory rent 58

Other 15

Total production cost = $488

Variable selling = $24

Fixed selling & administrative costs = $36 per unit

Selling price per unit = $750

Total variable cost per unit:

Direct materials $170

Direct labor 155

Variable factory overhead 75

Variable selling 24

Total variable production and selling costs = $424

Selling price per unit = $750

Contribution margin per unit = $326 ($750 = $424)

Thus, the contribution margin per unit sold is $326.

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Question Completion:

Variable selling & administrative costs $24 per unit Fixed selling & administrative costs $36 per unit Given a normal selling price per unit of $750, what is the contribution margin per unit sold