Sauer Company sells folding chairs for $40.00 per unit. The variable cost is $15.00 per unit. The easy chair requires 4 direct labor hours and 2 machine hours to produce. Which of the following is the correct contribution margin per machine hour? a. $12.50 b. $0.08 c. None of these. d. $0.10 e. $6.25

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
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Which of the following is the correct contribution margin per machine hour on these general accounting question?

Sauer Company sells folding chairs for $40.00 per unit. The variable
cost is $15.00 per unit. The easy chair requires 4 direct labor hours
and 2 machine hours to produce. Which of the following is the
correct contribution margin per machine hour?
a. $12.50
b. $0.08
c. None of these.
d. $0.10
e. $6.25
Transcribed Image Text:Sauer Company sells folding chairs for $40.00 per unit. The variable cost is $15.00 per unit. The easy chair requires 4 direct labor hours and 2 machine hours to produce. Which of the following is the correct contribution margin per machine hour? a. $12.50 b. $0.08 c. None of these. d. $0.10 e. $6.25
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