Soap Company manufactures Soap X and Soap Y and can sell all

Soap Company manufactures Soap X and Soap Y and can sell all it can make of either. Based on the following data, which statement is true?

X               Y

Sales Price                                              $30           $35   

Variable Cost     15             25   

Hours needed to process     3               5

Solution

X Y Sales Price 30 35 Variable Cost    15 25 Contribution margin 15 10 Hours needed to process 3 5 Contribution margin per hour 5 2 X is more profitable than Y.