Question
Genuine Plus manufactures three different products which are Universal I, Universal II, and Universal III. While market demand exists for all models, machine hours are
Genuine Plus manufactures three different products which are Universal I, Universal II, and Universal III. While market demand exists for all models, machine hours are limited. The following per unit data apply: Universal I Universal II Universal III Selling price $100 $120 $140 Direct materials 15 15 15 Direct labour ($12 per hour) 24 24 48 Other Variable costs ($4 per machine hour) 8 16 16 Fixed costs 22 22 22 Instructions a) Calculate the contribution margin per unit of the limited resource for each product (3 marks). Universal I = _____________ Universal II = ____________ Universal III = ____________ b) Which product should Genuine Plus produce in order to maximize the company's income? Why? (4 marks)
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