A company makes two models:
Model1 Model2
Sales price perunit....................................................... $200 $135
costs and expenses per unit:
Directmaterials..................................................... $51 $38
Directlabor............................................................ 33 30
Maufacturing overhead(applied at the
rate of $18 per machine hr, 1/3 ofwhich
is fixed and 2/3 which isvariable)........................... 36 18
Variable sellingexpenses........................................ 30 15
Total costs andexpenses perunit..................... 150 101
Price perunit........................................................... $50 $34
Machine-hours required to produce oneunit............. 2 1
Total manufacturing overhead amounts to $180,000 per month, 1/3 of which is fixed. The demand for either product is sufficient to keep the plant operating at full capicity (10,000 machine-hours per month). Assume that only one product is to be produced in the future. Prepare a schedule showing the contribution margin per machine-hour for each product.