Springer Products 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:
Direct labor ($17 per hour) | 17 | 17 | 34 |
Variable support costs ($7 per machine-hour) | 7 | 14 | 14 |
Fixed support costs | 13 | 13 | 13 |
Which model has the greatest contribution margin per machine-hour?
◦ Model X
◦ Model Y
◦ Model Z
◦ Both Model X and Model Y have the highest and same contribution margin per machine-hour