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Cam Corporation makes two products, Product A and Product B. Operating information from the previous year is as follows: The firm is limited to the

Cam Corporation makes two products, Product A and Product B. Operating information from the previous year is as follows:

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The firm is limited to the use of 8,000 labor hours. The firm should produce:

Product B because it has the lowest variable cost

Product A because it has the highest contribution margin

Product B because it has the highest contribution margin per labor hour

Product A because it has the highest contribution margin per labor hour

Sales price per unit Variable cost per unit Total labor hours used per unit Product A $ 17.00 $ 14.00 4 hours Product B $10.00 $ 8.00 2 hours

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