Reference no: EM132653709

                                                            Home Model                Deluxe Model                  Pro Model

Selling price ..............................  .$58                                 $65                         $80
Direct material ........................... 16                                     20                          19
Direct labor ($10 per hour) ...            10                                  15                           20
Variable overhead .....................        8                                   12                         16
Fixed overhead .........................           16                                5                           15

Question 1. If Carpenter's Mate, Inc. has excess machine capacity and can add more labor as needed (i.e., neither machine capacity nor labor is a constraint), the excess production capacity should be devoted to producing which product? (Assume that the excess capacity will be used for a single product line.)

Question 2. If Carpenter's Mate has excess machine capacity but a limited amount of labor time, the excess production capacity should be devoted to producing which product or products? if the Contribution margin per direct-labor hour, Deluxe Model: $12