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Bobby's garage has a chief mechanic who is in charge of working on the more difficult jobs. The mechanic can work on two types of
Bobby's garage has a chief mechanic who is in charge of working on the more difficult jobs. The mechanic can work on two types of jobs (engine overhaul and suspenson tuning) and works 40 hours per week. Customers have plenty of demand for both types of jobs (worth more than 40 hours per week each). The following table gives some details on both types of jobs:
Engine overhaul | Suspension tuning | |
Price that the customer is charged | $600 | $300 |
Direct materials used per job | $50 | $20 |
Direct labor (mechanic gets paid $40 per hour) | $160 | $80 |
What is the maximum contribution margin per week that Bobby's garage can earn with its chief mechanic if the 40 labor hours are allocated optimally?
A. | $3,900 | |
B. | $3,950 | |
C. | $4,000 | |
D. | $4,200 |
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