Which model, has the greatest contribution margin per machine-hour?

ACCOUNTING

Multiple Choice

Braun’s Brakes manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply:



Model X Model Y Model Z

Selling price $50 $60 $70

Direct materials 6 6 6

Direct labor ($12 per hour) 12 12 24

Variable support costs ($4 per machine-hour) 4 8 8

Fixed support costs 10 10 10



Which model, has the greatest contribution margin per machine-hour?

a. Model X

b. Model Y

c. Model Z

d. Both Models Y and Z


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