Surf Company can sell all of the two surfboard models it produces, but it has only 400
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Surf Company can sell all of the two surfboard models it produces, but it has only 400 direct labor hours available. The Glide model requires 2 direct labor hours per unit. The Ultra model requires 4 direct labor hours per unit. Contribution margin per unit is $200 for Glide and $300 for Ultra.
(a) Compute the contribution margin per direct labor hour for each product.
(b) Determine the best sales mix and the resulting contribution margin.
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