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Fairway Corporation manufactures three different product lines, Product A, Product B, and Product C. Considerable market...

Fairway Corporation manufactures three different product lines, Product A, Product B, and Product C. Considerable market demand exists for all models. The following per unit data apply:

   Product A    Product B    Product C

Selling Price    $40 $48 $50

Direct Materials 8 8    8

Direct Labor ($12 per hour) 12 12    24

Variable Support Costs ($4 per machine-hour) 8 12 8

Fixed Support Costs    10 10    10

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

b. If there is a machine breakdown, which model is the most profitable to produce?

Business   Accounting   
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