Q7

A company offers two versions of its main products: basic and luxury. The manufacturing process for these products is capital-intensive (i.e. primarily relies on the use of machines). The unit contribution margins for basic and luxury are dollar30 and dollar 44 respectively. The company has 340 uncommitted hours of machine time that can be allocated to manufacturing more products. The machine hours used to produce one unit of basic is 1.25. The machine hours used per unit of luxury is 1.75. Do not enter dollar signs or commas in the input boxes. Round your answers to 2 decimal places. Calculate the contribution margin per machine hour for each product. Basic: dollar Luxury: dollar Which product, basic or luxury, should be produced using the uncommitted machine hours? Assume that there are no capacity constraints. Item to be produced: 1 How many units of the product selected in part b) above will be produced using the uncommitted machine time? Round the number of units to 2 decimal places. Number of units: What is the company's increase in contribution margin if the product selected in part b) will be produced using the uncommitted machine time? Increase in contribution margin: dollar