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Cordova manufactures three types of stained glass window, cleverly named Products A, B, and C. Information about these products follows: Product A Product B Product
Cordova manufactures three types of stained glass window, cleverly named Products A, B, and C. Information about these products follows:
Product A | Product B | Product C | ||||
Sales price | $ | 42.00 | $ | 52.00 | $ | 82.00 |
Variable costs per unit | 19.20 | 13.25 | 35.20 | |||
Fixed costs per unit | 4.00 | 4.00 | 4.00 | |||
Required number of labor hours | 1.50 | 2.50 | 3.00 | |||
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Cordova currently is limited to 45,000 labor hours per month.
Assuming an infinite demand for each of Cordovas products, determine contribution margin per direct labor hour. (Round your answers to 2 decimal place.) (Find CM per DL hour for product A,B,C)
Which product would be Cordova's first choice to produce? (A,B or C)
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