Fairy Godmother Inc. (FGI) makes two products: Glass Slippers and Crystal Balls. FGI estimates they can sell 30,000 Glass Slippers and 20,000 Crystal Balls. Both products must be processed by the glass sanding machine, which has a capacity of 25,000 machine hours.
Fairy Godmother Inc Production Information
Per Unit Information Glass Slippers Crystal Balls
Selling Price 25 15
Direct Materials 8 5
Direct Labor 8 4
Variable Overhead 2 2
Variable Selling 1 1
Machine Hours 4 .75
What is the contribution margin per machine hour for Glass Slippers?
a. 1.50
b. 4
c. 3
d. 6
