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Walnut Company's product line includes three different models of a special tool to shape metal pieces. The three models are named Model X, Model Y,
Walnut Company's product line includes three different models of a special tool to shape metal pieces. The three models are named Model X, Model Y, and Model Z. There is considerable market demand for all models of the special tool. The following are the unit selling prices and unit variable manufacturing costs. Model X Model Y Model Z Selling price $80 $70 $60 Direct materials cost 20 20 20 Direct labor cost 20 20 10 Variable support cost 10 5 5 Direct labor cost per hour is equal to $10. If the amount of direct labor time is limited to 1000 hours and demand exceeds the amount that can be supplied for any of the three products, what will be the total contribution margin if the most profitable strategy for producing and selling products is adopted? Select one: a. $30,000 b. $50,000 c. $25,000 d. $15,000 e. $12,500
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