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

question 196

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 machine-hour?

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

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Definitions:

Materials Quantity Variance

The variance between the real amount of materials consumed in the production process and what was anticipated, calculated by the standard cost for each unit.

Materials Price Variance

Difference between the actual cost of material and the standard cost multiplied by the amount of material purchased.

Cash Account

An account reflecting the amount of cash a company or individual has available.

Work in Process Inventory

Items that are partially completed during manufacturing, which are not yet ready for sale.