Hermann Electronics manufactures two types of monitors, CX10 and CX20. The costs for the products are shown herebelow:

	CX10	CX20
Units sold	500	2,000
Unit sales price	$200	$450
variable cost per unit Raw material Labor	$60 $40	$90 $60
Total fixed costs = $40,000

Required:

Compute the contribution margin per unit for each of CX10 and CX20. (10 Marks)

Assuming the fixed costs are allocated based on the units produced. Compute the selling price per unit of each type in order to achieve a profit margin of 40%. (10 Marks)

Assume that Hermann has a maximum working labor capacity of 6,500 labor hours. Labour hours are paid at a rate of $20 per hour. Which of the two products CX10 or CX20 is most profitable for the company? (10 Marks). Show all your calculationsin in a clear and organized manner.