4:37 PM 4:37 PM Question 4 (7 Marks Hce Compuny is manufacing pcial sge ostai peplar...

a.

		Small	Deluxe	Big
Selling Price per unit	A	$         180	$            360	$         255
Variable cost per unit	B	$            60	$            100	$            55
Contribution per unit	A - B	$         120	$            260	$         200
Machine time per unit	C	4 minutes	13 minutes	8 minutes
Qty required per unit		24 kg	10 kg	16 kg
Contribution per minute of machine time	(A - B) / C	$            30	$              20	$            25
Rank		1	3	2

b.

		Small	Deluxe	Big
Selling Price per unit	A	$         180	$            360	$         255
Variable cost per unit	B	$            60	$            100	$            55
Contribution per unit	A - B	$         120	$            260	$         200
Qty required per unit	C	24 kg	10 kg	16 kg
Contribution per KG of material	(A - B) / C	$              5	$              26	$      12.50
Rank		3	1	2

c.
Deluxe has the largest unit contribution margin.

d.
The product with the largest unit contribution margin has the largest contribution if we see it as a unit of output. But if we evaluate it as inputs and break it down we find that it takes the maximum machine time per unit. So even though it has the largest unit contribution the same is spread over a larger time to calculate per minute contribution. In case of Qty of plastic material. it consumes the lowest, so here it gives the best ranking.