Ralph's Mufflers Manufactures Three Different Product Lines, Model X, Model

question 173

Essay

Ralph's Mufflers 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:
a.For each model, compute the contribution margin per unit.
b.For each model, compute the contribution margin per machine-hour.
c.If there is excess capacity, which model is the most profitable to produce? Why?
d.If there is constrained capacity, which model is the most profitable to produce? Why?
e.How can Ralph encourage her sales people to promote the more profitable model?

---

Definitions:

Conditioned Stimulus

An initially neutral signal that, once it has been linked with an unconditioned stimulus, ultimately leads to eliciting a conditioned reaction.

Unconditioned Stimulus

In behavioral psychology, an event that naturally and automatically triggers a response without prior learning.

Extinction

In conditioning, the process through which a previously reinforced behavior is weakened by the absence of reinforcement.

Spontaneous Recovery

The return of a conditioned response that had been previously eliminated, following a period where there was no exposure to the conditioned stimulus.