Subjects cost accounting

Cm Per Machine Hour 2Da01D

Step-by-step solutions with LaTeX - clean, fast, and student-friendly.

Search Solutions

Cm Per Machine Hour 2Da01D


1. **State the problem:** We need to find the contribution margin (CM) per machine hour given that each product requires 4 machine-hours and the CM per unit is 120. 2. **Formula used:** Contribution margin per machine hour is calculated as: $$\text{CM per machine hour} = \frac{\text{CM per unit}}{\text{Machine hours per unit}}$$ 3. **Apply the values:** $$\text{CM per machine hour} = \frac{120}{4}$$ 4. **Calculate:** $$\text{CM per machine hour} = 30$$ 5. **Interpretation:** This means for every machine hour used, the contribution margin earned is 30. 6. **Check machine hours limit:** The total machine hours available is 5,000, but this does not affect the CM per machine hour calculation. **Final answer:** The contribution margin per machine hour is **30**.