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# \$1.00Which motorcycle should produce?

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• Due on Nov. 27, 2011
• Asked on Nov 26, 2011 at 5:07:34PM

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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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• Posted on Nov 26, 2011 at 7:15:50PM
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