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Paul's Pumps manufactures three different product lines: Model A, Model B, and Model C. Plenty...

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Accounting

Paul's Pumps manufactures three different product lines: Model A, Model B, and Model C. Plenty of market demand exists for all models.The table below reports the prices and costs per unit of each product.

Model A Model B Model C
Selling price $50 $60 $70
Direct materials costs $ 6 $ 6 $ 6
Direct labor costs ($12 per labor hour) $12 $12 $24
Variable support costs ($4 per machine hour) $ 4 $ 8 $ 8
Fixed support costs $10 $10 $10

Assuming that machine hours are limited (i.e., this is the constrained resource), which model is the most profitable to produce?

Select one:

a. Model A

b. Model B

c. Model C

d. Model A and B would be equally profitable

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