Francis Corporation manufactures and sells three different types of water sport wakeboards. The boards vary in terms of their quality specifications—primarily with respect to their smoothness and finish. They are referred to as Smooth, Extra Smooth, and Super Smooth boards. Machine time is limited. More machine time is required to manufacture the Extra Smooth and Super Smooth boards. Additional information is provided below.
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Product |
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Smooth |
Extra Smooth |
Super Smooth |
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Selling price |
$60 |
$100 |
$160 |
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Variable costs and expenses |
50 |
75 |
130 |
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Contribution margin |
$10 |
$ 25 |
$ 30 |
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Machine hours required |
0.25 |
0.40 |
0.60 |
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Total fixed costs: $234,000 |
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