Chad Davis, vice president for operations at C&C Sports, is considering different strategies for managing the companys inventory. Earlier in the year, the company implemented a more systematic production schedule so that at the end of each month Finished Goods Inventory is 25% of the next months anticipated sales. That strategy freed a lot of inventory space and improved the companys cash flow. However, Chad noticed that because of the seasonal nature of the purchases of all of the products, especially award jackets, the need for direct labor hours fluctuated widely from one month to the next. Even though Chad is able to hire workers as needed, he is concerned that eventually he wont be able to find skilled workers unless they are promised a more consistent schedule. For C&C Sports, labor and sewing machines are constrained resources. The company can produce as many of their products as they have people to make them. Chad gathered the following unit sales and cost information about each product.

		Pants		Jerseys		Jackets
Sales price		$12.00		$14.80		$125.00
Direct materials		$4.47		$6.85		$44.72
Direct labor		2.40		1.92		14.40
Variable overhead		1.32		1.05		7.92
Fixed overhead		1.68		1.35		10.08
Total cost		$9.87		$11.17		$77.12
Gross profit		$2.13		$3.63		$47.88
Direct labor hours		.25		.20		1.50

Claire Elliot, vice president for finance and administration, reminded him that a commission of 5% of the sales price and shipping costs of $0.40 per item should also be considered when analyzing different strategies.

Contribution margin 2.81 Pants 3.84 Jerseys Jackets su Calculate the contribution margin per direct labor hour for each product. Contribution margin 11.24 Pants Jerseys su Jackets SL Assume that the sales team is able to increase jersey sales to 73,500 per year. What is the impact on total contribution margin if jerseys are made instead of pants? Assume that the number of DLH remains the same as in the initial scenario. (Round answer to nearest whole numbers, e.g. 15.) of 5 in contribution margin. What is the impact on total contribution margin if jerseys are made instead jackets? Assume that the number of DLH remains the same as in the initial scenario. (Round answer to nearest whole numbers, e.g. 15.) of 5 in contribution margin. Contribution margin 2.81 Pants 3.84 Jerseys Jackets su Calculate the contribution margin per direct labor hour for each product. Contribution margin 11.24 Pants Jerseys su Jackets SL Assume that the sales team is able to increase jersey sales to 73,500 per year. What is the impact on total contribution margin if jerseys are made instead of pants? Assume that the number of DLH remains the same as in the initial scenario. (Round answer to nearest whole numbers, e.g. 15.) of 5 in contribution margin. What is the impact on total contribution margin if jerseys are made instead jackets? Assume that the number of DLH remains the same as in the initial scenario. (Round answer to nearest whole numbers, e.g. 15.) of 5 in contribution margin