Chapter 11 Decision Making with a Strategic Emphasis 431 2011-7] / 11-41 Product-Profit consume lines are as follows ability Analysis, Scarce Resources Creighton Corporation produces a variety of he products. Unit selling prices and costs for three models of one of its product r electronic pro Selling price Direct materials Direct labor (@ $20/hour) Variabie overhead Fixed overhead No Frilis Standard Options Super $86 16 30 $70 14 20 S40 Variable allocated to products on the basis of machine hours. overhead is charged to products on the basis of direct labor dollars; fixed overhead is Required 1. What is fundamentally different about t he fixed versus variable overhead assigned to products? (Answer the in the context of the relevance of this difference to the determination of short-term product mix.) er of 2. Calculate for each product both the gross profit per unit and the contribution margin per u nit. Are eith these profitability measures useful for planning the optimum short-term product mix? Why or why not? 3. If the company has excess machine capacity but a limited amount of labor time, how should the optimum 4. Assume now that machine hours, not direct labor hours, is the limiting resource. How, if at all, would this 5. How can the optimum product mix be determined when there are only two products and one or more 6. How can the optimum product mix be determined when there are more than two products and one or 7. What is the primary role of the management accountant in terms of planning the optimum short- short-term product mix be determined? affect the product-mix decision? constraints? more constraints? term product mix