So far we have assumed that Royal Leicester Ltd makes only one product, the model of Richard
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So far we have assumed that Royal Leicester Ltd makes only one product, the model of Richard Ill. Direct materials for this model cost 60p, direct labour 30p, packaging 15p per unit, and it sells for £2.30. The company also makes a model of Henry VII who became king after defeating Richard III at the Battle of Bosworth. Direct materials for the model of Henry VII cost 90p, direct labour 35p and packaging 20p per unit, and this model has a selling price of £3.00. The fixed costs are £850 per week. Construct a marginal cost statement showing the marginal cost for 1 unit of each model and rank them according to their contribution per unit.
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