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Duo Company manufactures two products, Uno and Dos. Contribution margin data follow. Uno $15.00 Dos $39.00 Unit sales Less variable cost: Direct material Direct labor
Duo Company manufactures two products, Uno and Dos. Contribution margin data follow. Uno $15.00 Dos $39.00 Unit sales Less variable cost: Direct material Direct labor Variable overhead Variable selling and administrative cost Total variable cost Unit contribution margin $ 7.00 8.00 7.50 $ 8.00 1.00 1.40 .60 $11.00 $ 4.00 .50 $23.00 $16.00 Duo company's production process uses highly skilled labor, which is in short supply. The same employees work on both products and earn the same wage rate. Required: 1. Calculate the contribution margin per scarce resource for each of the products assuming an arbitrary time period for which direct laborers earn $1.00 per unit. 2. Which of Duo Company's products is most profitable
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