Widgeon Co. manufactures three products: Bales; Tales; and Wales. The selling pr

Question

Widgeon Co. manufactures three products: Bales; Tales; and Wales. The selling prices: $55; $78; and $32, respectively. The variable cost for each product are: $20; $50; and $15, ewspectively; Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process, Tales take 7 hours, and Walles take 1 hour. What is the contribution margin per month hour for Bales? a. $5 b$7 c $ 35 d $ 28 please attached graphic include selling price , variable cost, contribution margin per unit, hours taken, contribution margin per hour, comparison please help

Explanation / Answer

Calculate contribution margin per hour :

so contribution margin per hour for bales is $7 per hour

so answer is b) $7

Bales Tales Wales Selling price per unit 55 78 32 Variable cost per unit 20 50 15 Contribution margin per unit 35 28 17 machine hour per unit 5 7 1 Contribution margin per hour 7 4 17

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