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E7-11 Making Decisions Involving Constrained Resource [LO 7-2, 7-7] Cordova manufactures three types of stained glass window, cleverly named Products A, B, and C. Information
E7-11 Making Decisions Involving Constrained Resource [LO 7-2, 7-7]
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 | $ | 43.00 | $ | 53.00 | $ | 83.00 |
Variable costs per unit | 19.90 | 13.00 | 35.90 | |||
Fixed costs per unit | 5.00 | 5.00 | 5.00 | |||
Required number of labor hours | 1.50 | 2.50 | 3.00 | |||
Cordova currently is limited to 45,000 labor hours per month. Required: Assuming an infinite demand for each of Cordovas products, determine contribution margin per direct labor hour. (Round your answers to 2 decimal place.) Which product would be Cordova's first choice to produce?
Product B | |
Product A | |
Product C |
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