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3 / Humboldt Company manufactures two types of products: tables and chairs. The company can sell as many units of each product as it can
Humboldt Company manufactures two types of products: tables and chairs. The
company can sell as many units of each product as it can produce, but production is limited
by the availability of direct labor hours. The revenues, costs, and labor hours for the two
products are as follows:
Humboldt Company has direct labor hours available for production.
a If Humboldt Company uses the entire amount to produce tables, what is the
contribution margin in total dollars?
b If Humboldt Company uses the entire amount to produce chairs, what is the
contribution margin in total dollars?
c How much larger or smaller would Humboldt's earnings be if the company
produced tables instead of chairs with the available direct labor hours?
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