Zeke Co. manufactures two products that both require labor and machining.There is unlimited demand for these products.
|Unit sales and cost data and processing requirements follow:
|Product A||Product B|
|Contribution Margin Per Unit||50||120|
|Contribution Margin Per m/h||125||100|
|Contribution Margin Per l/h||25||20|
As Product A has the higher contribution margin thus higher incremental profit.
Fixed costs are not been included here are they are short term