Question
Norton's Mufflers manufactures two different product lines, Model X and Model Y. Market demand for Model X is 4,000 per month and demand for Model
Norton's Mufflers manufactures two different product lines, Model X and Model Y. Market demand for Model X is 4,000 per month and demand for Model Y is 5,500 per month. The available machine hours are 20,000 per month for Norton's molding machine, needed for all models. The following per unit data apply: Model X Model Y Selling price $80 $90 Direct materials $30 $30 Direct labor ($10 per hour) $15 $15 Variable support costs ($5 per machine-hour) $10 $15 Fixed support costs $20 $20
16.How many units of Model Y should be produced?
17.How many units of Model Y should be produced?
If Norton follows your advice from questions 16 & 17 what will be the total contribution margin per month:
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