Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 46,000 units per month is as follows:

Per Unit
Direct materials $45.60
Direct labor $8.70
Variable manufacturing overhead $1.70
Fixed manufacturing overhead $18.50
Variable selling& administrative expense $2.70
Fixed selling& administrative expense 8.60

An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.90 less per on this order than on normal sales.

Direct labor is a variable cost in this company

What is the contribution margin per unit on normal sales? (Round your intermediate calculations to 2 decimal places.)

a. $7.70 per unit
b. $5.80 per unit
c. $33.40 per unit
d. $7.20 per unit

2. When a Company pays a supplier for inventory it has purchased, the cash outflow is recorded in the investing activities section of the cash flow

a. True
b. False

3. A company with $500,000 in operating assets is considering the purchase of a machine that costs $60,000 and which is expected to reduce operating cost by $15,000 each year. These reductions in costs occur evenly throughout the year. The payback period of this machine in years is closest to (ignore income taxes)

a. 8.3 yrs
b. 0.25 yrs
c. 33.3 yrs
d. 4 yrs