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

question 25

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:
$\begin{array}{lrrr}&\text { Model X }&\text { Model Y }&\text { Model Z }\\\text { Selling price } & \$ 160 & \$ 180 & \$ 200 \\\text { Direct materials } & 60 & 60 & 60 \\\text { Direct labor ( } \$ 20 \text { per hour) } & 30 & 30 & 40 \\\text { Variable support costs }(\$ 10 \text { per machine-hour) } & 10 & 20 & 20 \\\text { Fixed support costs } & 40 & 40 & 40\end{array}$ 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?

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Definitions:

Environmental

Pertaining to the natural world and the impact of human activity on its condition.

Social Cognition

Refers to the processes through which people understand and make sense of others and themselves in social contexts.

Bystander Effect

A social psychological phenomenon wherein individuals are less likely to offer help to a victim when other people are present.

Selective Perception

Selective perception is the process by which individuals perceive what they want to in media messages while ignoring opposing viewpoints, based on their background, beliefs, and attitudes.