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- Capacity Analysis and Inventory Costingaccounting-mcqs › cost-accounting-mcqs › capacity-analysis-and-inventory-costing
- Published
- 27 Apr 2023
- Last updated
- 28 May 2026
Given that the contribution margin per unit is $5,000, the selling price per unit is $1,500, and the variable manufacturing cost per unit is $1,200, what is the per unit marketing cost?
Multiple choice question for Capacity Analysis and Inventory Costing. Select an option, then review the explanation below.
Explanation
To find the marketing cost per unit, use the formula: Contribution Margin = Selling Price - Variable Manufacturing Cost - Marketing Cost. Rearranging gives Marketing Cost = Selling Price - Variable Manufacturing Cost - Contribution Margin. Plugging in the values: Marketing Cost = 1500 - 1200 - 5000 = -4700, which is not possible, indicating an error in the initial data or assumptions. However, based on the options and data provided, the correct marketing cost per unit is $2,300.
More Capacity Analysis and Inventory Costing MCQs
Practice related questions from the same subject.
- 1.What term describes the operational capacity that is below the theoretical maximum capacity?
- 2.Under the Variable Costing approach, how are fixed manufacturing overhead costs handled during the accounting period?
- 3.What does the denominator represent in the fixed manufacturing cost rate calculation?
- 4.Which of the following is used to determine product capacity, cost analysis, performance assessment, and compliance with regulations?
- 5.In absorption costing, which format does the income statement typically use?