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1L COST VOLUME PROFIT ANALYSIS Shelby Machine Inc. manufactures three different product lines, folowing per unit Model Z. Considerable market demand exists for all modes.
1L COST VOLUME PROFIT ANALYSIS Shelby Machine Inc. manufactures three different product lines, folowing per unit Model Z. Considerable market demand exists for all modes. apply: Model X, Model Y, and The following per unit data ModeLX Model Y ModelZ Selling price Direct materials Direct labor ($20 per hour) Variable support costs ($10 per machine-hour) 100 $1600 $1800 600 600 00 300 $2000 600 400 200 400 20040 Fixed support costs 400 400 a. For each model, compute the contribution margin per unit. b. For each model, compute the contribution margin per machine-hour. c. If there is excess capacity, which model is the most profitable to produce? Why? d. If there is a machine breakdown, which model is the most profitable to produce? Why? e. How can Ralph encourage her sales people to promote the more profitable model
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