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Compute the contribution margin per machine hour

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Reference no: EM132515120

Compute contribution margin and determine the products to be manufactured. AN Helena Company manufactures and sells two products. Relevant per unit data concerning each product follow.

Product Basic Deluxe

Selling price $40 $52

Variable costs $22 $24

Machine hours 0.5 0.8

Instructions:

Question a. Compute the contribution margin per machine hour for each product.

Question b. If 1,000 additional machine hours are available, which product should Helena manufacture?

 

Question c. Prepare an analysis showing the total contribution margin if the additional hours are:

1. Divided equally between the products.

2. Allocated entirely to the product identified in part b.

Reference no: EM132515120

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