Test Final Exam Chapters 7-10 #70136 # Unanswered: 31 Time remaining 02:37 Narly
ID: 2562732 • Letter: T
Question
Test Final Exam Chapters 7-10 #70136 # Unanswered: 31 Time remaining 02:37 Narly Skate boards manufactures three different product lines Base, Long, and Trick Considerable market demand exists for all models. The following per unit data apply Base Mode Long Model Trick Model $ S120 Selling price Direct materials Direct labor ($12 per hour) Variable supPO $100 12 24 12 24 16 20 $140 12 48 16 20 rt costs ($4 per machine-hour) costs 20 Which model has the greatest contribution margin per unit? A) trick model long model base model both the base model and the long model Previous Bookmark Next Summ0Explanation / Answer
Answer:
B) Long model has greatest contribution margin per unit
Working notes for the above answer
Base
Model
Long
Model
Trick
Model
Selling price
100
120
140
Less
Variable cost*
44
52
76
Contribution margin per unit
56
68
64
*
Base
Model
Long
Model
Trick
Model
DM
12
12
12
DL
24
24
48
Variable support Cost
8
16
16
Total Variable cost
44
52
76
So we can say that out of three model long model has higher Contribution margin per unit
Base
Model
Long
Model
Trick
Model
Selling price
100
120
140
Less
Variable cost*
44
52
76
Contribution margin per unit
56
68
64
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