Question

Buzz Appliances manufactures two products. Food Processors and Espresso Machines. The following data are available Sales price Variable costs Food Processo 5135 560 Espresso Makers $275 $150 The company can manufacture other two food processors per machine hour or three espresso machines per machine hour. The company's production capacity is 1200 machine hours per month What is the contribution margin per machine hour for espresso machines? OA. 5585 OB. 5150 OC. 5375 OD. $125

Answer 1

The contribution margin per machine hour for espresso​ machines

The contribution margin per unit for Espresso makers = Selling price per unit – Variable cost per unit

= $275.00 per unit - $150.00 per unit

= $125.00 per unit

Therefore, the contribution margin per machine hour for espresso​ machines = The contribution margin per unit for Espresso makers x 3 espresso machines per machine hour

= $125.00 per unit x 3

= $375.00

“Hence, the contribution margin per machine hour for espresso machines will be (c). $375”