Billings Company manufactures and sells two products. Relevant per unit data concerning each product follow.

Product
		Basic		Deluxe
Selling price		$42.98		$54.82
Variable costs		$10.08		$24.72
Machine hours		0.7		0.7

(1) Compute the contribution margin per machine hour for each product. Basic= 47 Deluxe= 43

(2) If 1,080 additional machine hours are available, which product should Billings manufacture?

Basic

Prepare an analysis showing the total contribution margin if the additional 1,080 hours are: (1) Divided equally between the products.

(2) Allocated entirely to the product identified above.