Assume that only one product is to be produced in the

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Reference no: EM13481889

A company makes two models:

Model1 Model2

Sales price perunit....................................................... $200 $135

costs and expenses per unit:

Directmaterials..................................................... $51 $38

Directlabor............................................................ 33 30

Maufacturing overhead(applied at the

rate of $18 per machine hr, 1/3 ofwhich

is fixed and 2/3 which isvariable)........................... 36 18

Variable sellingexpenses........................................ 30 15

Total costs andexpenses perunit..................... 150 101

Price perunit........................................................... $50 $34

Machine-hours required to produce oneunit............. 2 1

Total manufacturing overhead amounts to $180,000 per month, 1/3 of which is fixed. The demand for either product is sufficient to keep the plant operating at full capicity (10,000 machine-hours per month). Assume that only one product is to be produced in the future. Prepare a schedule showing the contribution margin per machine-hour for each product.

Reference no: EM13481889

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