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$1.00 Which motorcycle should produce?

  • From Business: Finance
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  • Due on Nov. 27, 2011
  • Asked on Nov 26, 2011 at 5:07:34PM
Asked by :
QuietStorm
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Q:

Harley Davidson sells motorcycle X and Y.  Motorcycle X sells for $10,000, has variable cost (labor and material) of $2,000, and requires 10 hours of use of machinery to produce.  Motorcycle Y sells for $12,000, has variable costs (labor and material) of $8,000, and requires 2 hours of use of machinery to produce. Harley Davidson has excess capacity of 5,000 hours of use of machinery.  Which motorcycle should it produce?

a. Motorcycle X because it has a higher contribution margin of $8,000.

b. Motorcycle Y because it has a higher contribution margin per hour of $2,000.

c.  Motorcycle X because it has a higher contribution margin per hour of $4,000.

d. Motorcycle Y because it has a higher contribution margin of $4,000.

 

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  • This tutorial was purchased 3 times and rated A+ by students like you.
  • Posted on Nov 26, 2011 at 7:15:50PM
Posted by :
ridho
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A:
Preview: ... Workhours required = 10 Margin per hours = $800 per hours   Motorycl ...
The full tutorial is about 54 words long .