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Completion Status: 2 uestion 2 4 10 points Save Answer Bahrain Rubber Company (BRC) manufactures a line of speed humps. Demand for the company's products
Completion Status: 2 uestion 2 4 10 points Save Answer Bahrain Rubber Company (BRC) manufactures a line of speed humps. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company provided the following data: Medium bumps size Product Demand next year (units) Selling price Direct materials Direct labor Direct labor hours per unit The following additional information is available: Small humps size 50,000 $16.70 $4.30 56.40 0.40 35,000 $26.60 56.44 $11.20 0.70 Large humps size 325,000 $9.60 $3.20 $3.20 0.2 a. The company's plant has a capacity 99,000 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all three products. b. The direct labor rate of $16 per hour is expected to remain unchanged during the coming year. c. Fixed cost total $520,000 per year. Variable overhead costs are $2 per direct labor-hour. d. All the company's nonmanufacturing costs are fixed. Required 1. How much variable overhead cost is incurred to manufacture one unit of each of the company's three products? 2. Assuming that direct labor-hours is the company's constraining resource, what is the contribution margin per direct labor-hour for each of the company's three products? Rank them in terms of profitability? 3. Which product has the largest contribution margin per unit? Why wouldn't this product be the most profitable use of the constrained resource in either case? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt Ev A IX 1
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