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Nordin manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data
Nordin manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply: Model X Model Y Model Z RM80 RM90 RM100 30 30 15 20 30 Selling price Direct materials Direct labor (RM10 per hour) Variable support costs (RM5 per machine-hour) Fixed support costs 10 10 20 20 20 (i) For each model, compute the contribution margin per unit. (6 marks) For each model, compute the contribution margin per machine-hour. (6 marks) If there is excess capacity, identify and justify the model which is the most profitable to produce. (4 marks) (iv) If there is a machine breakdown, identify and justify the model which is the most profitable to produce. (4 marks)
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