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Brinkley Corporation makes three products, and is currently facing a labor shortage only 3,000 hours are available this month. The selling price, costs, and labor
Brinkley Corporation makes three products, and is currently facing a labor shortage only 3,000 hours are available this month. The selling price, costs, and labor requirements of the three products are as follows:
| Product A | Product B | Product C | |||
Selling price | $ | 50.00 | $ | 30.00 | $ | 40.00 |
Variable cost per unit | $ | 35.00 | $ | 10.00 | $ | 30.00 |
Direct labor hours per unit |
| 1.5 |
| 3 |
| 2 |
- What is the contribution margin per unit for each product?
- What is the contribution margin per direct labor hour for each product?
- Assume Brinkley has unlimited demand for each product. Which product should Brinkley focus on producing?
- Assume that sufficient constraint time is available to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource? (Round your answer to 2 decimal places.)
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