Answer the Following Questions Using the Information Below:
Dynondo's Brakes

question 211

Multiple Choice

Answer the following questions using the information below:
Dynondo's Brakes 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:
$\begin{array}{lrrr}&\text { Model X }&\text { Model Y }&\text { Model Z }\\\text { Selling price } & \$ 50 & \$ 60 & \$ 70 \\\text { Direct materials } & 6 & 6 & 6 \\\text { Direct labor ( } \$ 12 \text { per hour) } & 12 & 12 & 24 \\\text { Variable support costs ( } \$ 4 \text { per machine-hour) } & 4 & 8 & 8 \\\text { Fixed support costs } & 10 & 10 & 10\end{array}$
-Which model has the greatest contribution margin per unit?

• A) Model X
• B) Model Y
• C) Model Z
• D) Both Model X and Model Y have the highest and same contribution margin per unit

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Definitions:

Labor Productivity Growth

An increase in the efficiency of labor, typically measured as the amount of goods or services produced per hour of labor.

Labor-Capital Ratio

The ratio of labor inputs (workforce numbers or hours worked) to capital inputs (machinery, buildings, and technology) in production processes.

Capital Stock

The total amount of physical and financial assets owned by a business or country, including buildings, machinery, equipment, and shares.

Labor Productivity

The measure of economic performance that compares the amount of goods and services produced with the number of labor hours used to produce them.