Question

Exercise 6-13

Helena Company manufactures and sells two products. Relevant per unit data concerning each product follow.

Product Basic Deluxe Selling price $45 $51

Variable costs $30.60 $23.00 Machine hours 0.40 0.80

Compute the contribution margin per machine hour for each product.

(Round answers to 0 decimal places, e.g. 5,275.)

Basic Deluxe Contribution margin per machine hour $ $ If 1,090 additional machine hours are available, which product should Helena manufacture?

Calculate total contribution margin if the additional 1,090 hours are: (Round intermediate calculation and final answers to 0 decimal places, e.g. 5,275.)

(1) Divided equally between the products. Basic Deluxe Total Contribution margin $ $ $

(2) Allocated entirely to the product identified above. Basic Deluxe Total Contribution margin $ $ $

Answer 1