A business manufactures three similar products for eventual sale: J, K, and L. The selling prices are $30, $40, and $50, respectively. The variable costs of producing each are $25, $33, and $35, respectively. Each product must go through the same machine, and that machine is limited in its production to 1,800 hours per month. Product J takes 1 hour to process, Product K takes 2 hours, and Product
L takes 3 hours. What is the contribution per machine hour for product L?
a. $15
b. $5
c. $3.50
d. $7
b
You might also like to view...
Which of the following is a basic factor to consider in sales call allocation?
A. Personality style of customers B. Nonselling time C. Revenue projections for the year D. Structure of sales presentation E. Cost of goods sold
What are the reasons for the popularity of plea bargains with both sides in a criminal case?
What will be an ideal response?
Real Estate Investments, Inc., owns and manages an office building. Secure Insurance Company agrees to lease the building for five years. Under the lease, Secure is obligated to pay all of the utility costs. Two years into the term, Secure asks Real Estate to modify the lease to provide that the utility costs be split equally between them. Real Estate agrees, but later decides it does not want to share the costs and refuses to pay. Is the landlord bound to its agreement to share the utility costs? Why or why not?
What will be an ideal response?
Discuss the reasons companies make investments.
What will be an ideal response?