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Model GG $140 12 Model TS Selling price $100 Direct materials Direct labor ($12 per hour) 24 Variable support costs (S4 per machine-hour 8 Fixed
Model GG $140 12 Model TS Selling price $100 Direct materials Direct labor ($12 per hour) 24 Variable support costs (S4 per machine-hour 8 Fixed support costs 20 Variable support costs are machine time at $4 per machine hour. Model AY $120 12 24 16 T 20 | T 48 1 6 20 Required: 1) Which model has the greatest contribution margin per unit? 2) Which model has the greatest contribution margin per machine-hour? 3) If the product mix is typically made up of 1 unit of TS, 3 units of AY and 2 units of GG how many units of each of the three individual products will the company need to produce to breakeven if total fixed overhead (which includes fixed support costs) is $1,500,000? 4) If in addition to covering fixed overhead the company wants to make a $1,400,000 aftertax profit how many units (round up to whole numbers) of each of the three individual products will the company need to produce? Their corporate income tax rate is 30%
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