Question: Because machine hours is the constraint, Smart Touch Learning needs to figure out which product has the highest contribution margin per machine hour. Exhibit 25-10

Because machine hours is the constraint, Smart Touch Learning needs to figure out which product has the highest contribution margin per machine hour. Exhibit 25-10 illustrates the calculation for the contribution margin per machine hour for each product

Smart Touch Leaning's Contribution Margin per Machine Hour

Standard Tablet Premium Tablet

1) Hours required to produce 1 tablet 7.5000 10.0000

2) Tablets produced per hour (1hr/(1)) 0.1333* 0.1000

3) Contribution margin per tablet $192.50 $225.00

Contribution margin per machine {(2) x (3)} $25.66* $22.50

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