Widgeon Co. manufactures three products: Bales; Tales; and Wales. The selling prices are: $55; $78; and $32, respectively. The variable costs for each product are: $20; $50; and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 7 hours to process, Tales take 4 hours, and Wales take 1 hour.
1. Which product has the highest contribution margin per machine hour?
a. Bales
b. Tales
c. Wales
d. Bales and Tales have the same
2. What is the contribution margin per machine hour for Bales?
a. $7
b. $5
c. $35
d. $28
3. What is the contribution margin per machine hour for Tales?
a. $7
b. $5
c. $28
d. $35
4. What is the contribution per machine hour for Wales?
a. $35
b. $28
c. $17
d. $8