1. Braun's Brakes manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market...
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1. Braun's Brakes 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:
Which model has the greatest contribution margin per unit?
a. Model X
b. Model Y
c. Model Z
d. Models X and Y
2. Which model has the greatest contribution margin per machine-hour?
a. Model X
b. Model Y
c. Model Z
d. Models Y and Z
3. If there is excess capacity, which model is the most profitable to produce?
a. Model X
b. Model Y
c. Model Z
d. Models X and Y
4. If there is a machine breakdown, which model is the most profitable to produce?
a. Model X
b. Model Y
c. Model Z
d. Models Y and Z
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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