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 a machine breakdown, which model is the most profitable to produce? Why?
e. How can Ralph encourage her sales people to promote the more profitable model?
Definitions:
Physical Illnesses
Conditions affecting the body's structure or function that are not connected to mental health, characterized by specific signs and symptoms.
Five-factor Model
A theory in psychology that describes personality through five broad traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism.
Agreeableness
Agreeableness is a personality trait that reflects a person's tendency to be friendly, compassionate, cooperative, and sympathetic towards others.
Sympathetic
Related to the sympathetic nervous system, which is a section of the autonomic nervous system responsible for triggering the body's "fight or flight" reaction.
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