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Macy Corporation's relevant range of activity is 6,300 units to 13,500 units. When it produces and sells 9,900 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials $ 5.20
Direct labor $ 3.65
Variable manufacturing overhead $ 1.65
Fixed manufacturing overhead $ 2.90
Fixed selling expense $ 0.95
Fixed administrative expense $ 0.65
Sales commissions $ 0.90
Variable administrative expense $ 0.55
If the selling price is $29.00 per unit, the contribution margin per unit sold is closest to:
a) $10.50 b) $6.70 c) $20.15 d) $17.05
Please explain the correct answer.
Explain to the Board of Directors at least three reasons why your selected choice is the most advantageous to the company.
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