Katy Co. manufactures three sizes of product lines: Model A, Model B, and Model C. Product information for each product line is provided below.

	Model A	Model B	Model C
Unit selling price	500	800	1000
Unit costs
Variable manufacturing	200	350	450
Fixed manufacturing	150	200	225
Variable selling and administrative	50	100	125
Unit profit	100	150	200
Demand in units	200	150	100
Machine hours per unit	20	40	50

The maximum machine-hours available are 12,000 per week. Required:

a. For each model, compute the contribution margin per unit.

b. For each model, compute the contribution margin per machine-hour. c. If there is excess capacity, which model is the most profitable to produce? Why? d. If there is a machine breakdown, which model is the most profitable to produce? Why? e. How can Victoria encourage her sales people to promote the more profitable model?