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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%