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:

Price Appreciation

The increase in the value of an asset over time, often reflected in its selling price surpassing its original purchase price.

Taxable Investors

Individuals or entities subject to taxes on income, dividends, or capital gains generated through their investments.

Liquidity

The speed and ease with which an asset can be converted to cash.

Inflation Protection

A financial strategy to safeguard the purchasing power of assets against the adverse effects of inflation.