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A company produces three products, and is currently facing a labor shortage; only 3,020 labor hours are available this month. The selling prices, costs,
A company produces three products, and is currently facing a labor shortage; only 3,020 labor hours are available this month. The selling prices, costs, and labor requirements of the three products are as follows Product A $ 52.00 Product B $ 38.00 Product C $48.00 $ 41.00 1.8 $ 12.00 $32.00 3.2 2.2 Sales price Variable cost per unit Direct labor hours per unit Required: a. What is the contribution margin per unit for each product? b. What is the contribution margin per machine hour for each product? c. Assume there is unlimited demand for each product. Which product should the company focus on producing?
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