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Contribution per key factor

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Products, Y or Z. Sales demand is unlimited for both products at current prices. Product Y requires 1 hour of machine time per unit of output and Product Z requires 2 hours of machine time per unit of output. The following information summarizes the per-unit costs of products Y and Z

Y Z
Selling price $75 $80
DM 30 5
DL 20 10
VOH 10 20
FOH 5 30
Based a variable costing approach, how would you maximize profits? Support your answer.

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Solution Summary

This provides the steps to calculate the contribution per key factor and also its significance

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Here we will find the contribution per key factor

Contribution of Y= 75-30-30=10=$15 ...

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