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A company manufactures three different product lines: Model X, Model Y and Model Z. Considerable market demand exists for all three models. Financial data per unit are below:

Model X Model Y Model Z
Selling price $50 $60 $70
Direct materials 6 6 6
Direct labor ($12 per hour) 12 12 24
Variable overhead costs ($4 per machine hour) 4 8 8
Fixed overhead costs 10 10 10

If there is excess capacity, which model is the most profitable to produce?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M985226

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