question archive Mufflers manufactures three different product lines, Model X, Model Y, and Model Z
Mufflers manufactures three different product lines, Model X, Model Y, and Model Z
Subject:AccountingPrice: Bought3
Mufflers manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply:
Model XModel YModel Z
Selling price$160$180$200
Direct materials606060
Direct labour ($20 per hour)303040
Variable support costs ($10 per machine-hour)102020
Fixed support costs404040
a.For each model, compute the contribution margin per unit.
b.For each model, compute the contribution margin per machine-hour.
c.If there is excess capacity, which model is the most profitable to produce? Why?
d.If there is constrained capacity, which model is the most profitable to produce? Why?
e.How can Ralph encourage her sales people to promote the more profitable model?
42) Norton's Mufflers manufactures three different product lines: Model X, Model Y, and, Model Z.
Considerable market demand exists for all models. The following per unit data apply:
Model XModel YModel Z
Selling price$80$90$100
Direct materials303030
Direct labour ($10 per hour)151520
Variable support costs ($5 per machine-hour)51010
Fixed support costs202020
Required:
a.For each model, compute the contribution margin per unit.
b.For each model, compute the contribution margin per machine-hour.
c.If there is excess capacity, which model is the most profitable to produce? Why?
d.If there is a machine breakdown, which model is the most profitable to produce? Why?
e.How can Norton encourage her sales people to promote the more profitable model?
