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Assume Fender produces only three guitars: the Stratocaster, Dreadnought and Telecaster. A limitation of 7 2 0 labor hours per week prevents Fender from meeting

Assume Fender produces only three guitars: the Stratocaster, Dreadnought and Telecaster. A limitation of 720 labor hours per week prevents Fender from meeting the sales demand for these products. Product information is as follows:
Stratocaster Dreadnought Telecaster
Unit selling price $864 $540 $1,134
Unit variable costs (540)(270)(972)
Unit contribution margin $324 $270 $162
Labor hours per unit 362436
Required
Determine the weekly contribution from each product when total labor hours are allocated to the product with the highest.
1. Unit selling price.
2. Unit contribution margin.
3. Contribution per labor hour.
(Hint: Each situation is independent of the others.)
Highest
Unit
Selling Price Highest
Contribution
per Unit Highest
Contribution
per Labor Hour
Answer
Answer
Answer
Labor hours available Answer
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Labor hours per unit Answer
Answer
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Weekly production Answer
Answer
Answer
Unit contribution margin Answer
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Weekly contribution Answer
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