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:

Plant

A living organism of the kind exemplified by trees, shrubs, herbs, grasses, ferns, and mosses, typically growing in a permanent site, absorbing water and inorganic substances through its roots, and synthesizing nutrients in its leaves by photosynthesis using the green pigment chlorophyll.

Total Product Curve

A curve that shows the relationship between the quantity of inputs used in production and the quantity of output from production.

Marginal Product Curve

A graph that illustrates the change in output when an additional unit of input is added, holding all other inputs constant.

Production Function

Describes the relationship between inputs used in production and the resulting output.