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:
Hopeless
A state of despair when an individual feels there are no options or solutions available.
Helpless
A state in which an individual feels they have no control over situations or outcomes, often leading to passivity or resignation.
Giving Up
The act of stopping or ceasing to continue an effort, action, or pursuit, often due to discouragement or challenge.
Work Satisfaction
The level of contentment employees feel about their job, including aspects such as tasks, environment, and compensation.
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