Managerial Accounting

Free Version

Upgrade subject to access all content


Ringlet: Highest Contribution Margin per Machine Hour


Ringlet Brothers makes three products that are all in high demand. The costs per unit for the most recent period are shown below.

Model A Model B Model C
Sales price \$160 \$180 \$200
Direct materials \$60 \$60 \$60
Direct labor (\$20 per DL hour) \$30 \$30 \$40
Variable overhead (\$10 per machine hour) \$10 \$20 \$20
Fixed overhead \$40 \$40 \$40

What is the LOWEST contribution margin per machine-hour of these three products?