Insiteful Instruments produces two models of binoculars. The information for each model is as follows:

	Model 100					Model 101
unit selling price			$	200		$		$	215
Cost and expenses per unit:
Direct materials	$	51				$	38
direct labor		33					30
Manufacturing overhead (1/3 fixed and 2/3 variable, applied at the rate of $18 per machine-hour)		36					72
variable selling expenses		30					15
Total cost and expenses per unit				150					155
profit per unit			$	50				$	60
Machine hours required to produce one unit				2					4

Total manufacturing overhead is $180,000 per month, one third of which is fixed. The demand for both products is sufficient to keep the plant running at full capacity (10,000 machine-hours per month). Suppose only one product will be produced in the future.

a.	Prepare a chart showing the contribution margin per machine-hour for each product.

Answer rating: 100% (QA)

e Solution a Calculate Contribution margin per machine hour Sale Price LES... View the full answer