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Question - Bellissima Make-up Artists Ltd makes two products: Lipstick and compact powder. Operating information from the previous year is:
Lipstick Compact powder
Sales price per unit $7.00 $10.00
Variable cost per unit $4.00 $8.00
Units produced and sold 5,000 4,000
Machine hours used 5,000 2,000
Fixed costs of $20 000 per year are presently allocated evenly between both products. If the product mix were to change, total fixed costswould remain the same. Calculate the contribution margin per machine hour for compact powder.
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