Omega Company reported the following information for the company's two products: Product X Product YSelling price per unit$35 $25 Variable cost per unit 20 15 ?Assume that 75,000 machine hours are available; product X takes four machine hours to produce, and product Y takes two machine hours to produce. The company can sell all it can make of either product. Which of the following statements is true?
A. Product X should be produced because it provides a greater contribution margin.
B. Product Y should be produced because more of it can be produced.
C. Product Y should be produced because it will produce greater total profit.
D. Both products provide the same total profit.
Answer: C
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Neef Corporation has provided the following data for its two most recent years of operation: Selling price per unit$84Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials$12Direct labor$5Variable manufacturing overhead$4Fixed manufacturing overhead per year$432,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold$5Fixed selling and administrative expense per year$61,000 Year 1 Year 2Units in beginning inventory0 3,000Units produced during the year12,000 9,000Units sold during the year9,000 10,000Units in ending inventory3,000 2,000The unit product cost under absorption costing in Year 1 is closest to:
A. $62.00 B. $36.00 C. $57.00 D. $21.00