Oradell Company sells its single product at a price of $60 per unit and incurs the following variable costs per unit of product:

Oradell Company sells its single product at a price of $60 per unit and incurs the following variable costs per unit of product:

Direct material

$16

Direct labor

12

Manufacturing overhead

7

Variable manufacturing costs

$35

Selling expenses

5

Total variable costs

$40

Oradell’s annual fixed costs are $880,000, and Oradell is subject to a 30% income tax rate.

If prime costs increased by 20% and all other values remained the same, Oradell Company’s contribution margin (to the nearest whole percent) would be

A) 24%

B) 30%

C)20%

D) 76%

"Get 15% discount on your first 3 orders with us"
Use the following coupon
"FIRST15"

Order Now