Widgeon Co. manufactures three products: Bales; Tales; and Wales. The selling prices are: $55; $78; and $32, respectively. The variable costs for each product are: $20; $50; and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 7 hours to process, Tales take 4 hours, and Wales take 1 hour. What is the contribution margin per machine hour for Bales

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Answer:

  $5/h

Explanation:

The contribution margin for Bales is ...

  $55 -20 = $35

The machine hours for Bales is 7.

The contribution margin per machine hour is ...

  $35/(7 h) = $5/h

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