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42 Excess demand, manufacturing, qualitative considerations (LO3, LO4, LO5). Justine Brass specializes in marine pumps. Justine's monthly contribution margin and profit are $125,000 and $50,000,
42 Excess demand, manufacturing, qualitative considerations (LO3, LO4, LO5). Justine Brass specializes in marine pumps. Justine's monthly contribution margin and profit are $125,000 and $50,000, respectively, at its current monthly volume of 2,500 pumps. At this volume, Justine's firm fully uses its available capacity of 10,000 labor hours. Justine's management has been trying to branch out into making valves. A buyer has contacted Justine for an order of 500 valves. Each valve will consume 3 labor hours and yield a contribution of $30 per unit. Required: a. By how much will Justine's monthly profit change if the valve order is accepted? b. Determine the contribution margin per valve at which Justine's monthly profit is the same whether it accepts or rejects the valve order
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