Gunst Company produces three video games: Android, Bio-Mutant, and Cyclops. Cost and revenue data pertaining to each
Question:
Gunst Company produces three video games: Android, Bio-Mutant, and Cyclops. Cost and revenue data pertaining to each product are as follows.
At the present time, demand for each of the company’s products far exceeds its capacity to produce them. Thus, management is trying to determine which of its games to concentrate on next week in filling its backlog of orders. Gunst’s direct labor rate is $12 per hour, and only 1,000 hours of direct labor are available each week. Determine the maximum total contribution margin the company can make by its best use of the 1,000 available hours.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
To maximize its total contribution margin the company should produce and sell the product with the highest contribution margin per direct labor hour As shown below this product is BioMutant Android BioMutant Cyclops Selling price 100 60 125 Direct labor 48 24 60 Direct materials 9 8 16 Variable overhead 7 4 9 Contribution margin per unit 36 24 40 Direct labor hours per unit direct labor cost per unit 12 per hour 4 2 5 Contribution margin per direct labor hour 9 12 8 With 1000 direct labor hours available the company can produce a ...View the full answer
Answered By
Mario Alvarez
I teach Statistics and Probability for students of my university ( Univerisity Centroamerican Jose Simeon Canas) in my free time and when students ask for me, I prepare and teach students that are in courses of Statistics and Probability. Also I teach students of the University Francisco Gavidia and Universidad of El Salvador that need help in some topics about Statistics, Probability, Math, Calculus. I love teaching Statistics and Probability! Why me?
** I have experience in Statistics and Probability topics for middle school, high school and university.
** I always want to share my knowledge with my students and have a great relationship with them.
** I have experience working with students online.
** I am very patient with my students and highly committed with them
1+ Reviews
10+ Question Solved
Related Book For 
Financial And Managerial Accounting The Basis For Business Decisions
ISBN: 9781260247930
19th Edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Question Posted:
