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Tanek Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features, all

Tanek Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features, all are good sellers. Tanek is currently operating at full capacity with limited machine time. Sales and production information relevant to each model follows.

Product

Economy

Standard

Deluxe

Selling price $35 $58 $115
Variable costs and expenses $18 $23 $53
Machine hours required 0.5 0.8 1.6

Calculate contribution margin per unit.

Product

Economy

Standard

Deluxe

Contribution margin per unit $

$

$

Ignoring the machine time constraint, which single product should Tanek Industries produce? Deluxe, Economy, or Standard

What is the contribution margin per unit of limited resource for each product? (Round answers to 2 decimal places, e.g. 10.50.)

Economy

Standard

Deluxe

Contribution margin per limited resource

$

$

$

If additional machine time could be obtained, how should the additional time be used? The additional time should be used to produce the Standard, Deluxe, or Economy product.

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