Narly Skateboards Manufactures Three Different Product Lines, Base, Long, and Trick

question 55

Multiple Choice

Narly Skateboards manufactures three different product lines, Base, Long, and Trick. Considerable market demand exists for all models. The following per unit data apply:
-Which model has the greatest contribution margin per machine-hour?

• A)base model
• B)long model
• C)trick model
• D)both the long model and the trick model

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Definitions:

Inventory Valuation

The method used to calculate the cost of goods sold and the ending inventory, factoring in purchases and any changes in costs or quantities.

LIFO

"Last In, First Out," an inventory valuation method where the last items purchased are the first sold.

FIFO

"First-In, First-Out," an inventory valuation method where the costs of the earliest items purchased or produced are the first to be expensed.

Cost Of Goods Available

The total cost of inventory that a company has available to sell at any given time, calculated by adding the beginning inventory to the cost of goods purchased or manufactured.