Colt Company produces two skateboard models. Machine time per unit for Hero is two hours and for Flip is one hour. The machine’s capacity is 1,600 hours per year. Colt can sell up to 500 units of Hero and 900 units of Flip per year. Selling prices and variable costs follow. 

(a) Compute the contribution margin per machine hour for each product. 

(b) Determine the best sales mix of products. 

(c) Compute the total contribution margin for the best sales mix.

Transcribed Image Text:

Hero Flip Selling price per unit ... $150 $95 Variable costs per unit 50 55