Which line should timepiece products drop

Assignment Help Cost Accounting

Reference no: EM13903208

Dropping a product line. Timepiece Products, a clock manufacturer, operates at capacity. Constrained by machine time, the company decides to drop the most unprofitable of its three product lines. The accounting department came up with the following data from last year's operations:

	Manual	Electric	Quartz
Machine Time per Unit Selling Price per Unit	0.4 Hour $20	2.5 Hours $30	5.0 Hours $50
Less Variable Costs per Unit	10	14	28
Contribution Margin	$10	$16	$22

Which line should Timepiece Products drop? (Hint: Compute the contribution per machine hour because machine time is the constraint.)

Reference no: EM13903208

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