In late September 2017, Apple Inc. (NYSE: AAPL) announced that it would be releasing three new models of its iPhone in the fourth quarter of 2017: the iPhone X, the iPhone 8 Plus, and the iPhone 8. In addition, it would continue to sell some of the older models. The following table contains price and cost estimates for the current three new iPhone models plus one older model. The estimated direct materials costs were developed by IHS Markit and Susquehanna International Group. Other listed costs and data are assumptions. See data table for readable data Questions Which iPhone model is the most profitable for Apple? Show details using a computation from the chapters to defend your reasoning. Why might Apple offer several iPhone models rather than just the one most profitable model?

iPhone 8 iPhone 7 iPhone XiPhone 8 Plus 999 $ 799 $ 699 $ 649 Sales price (base models) Estimated direct materials (from IHS Markit andd Susquehanna International Group) Estimated direct labor (assembly and testing) Estimated retail packaging and shipping to warehouses/stores) Total variable costs Contribution margin per phone Minutes of skilled labor required for assembly 581 288 248 248 4 257 392 4 4 297 502 $ 257 594 405 $ 442 $ 4