Exercise $12-5$ Utilization of a Constrained Resource $[$LO$3]$

The following are the selling price, variable costs, and contribution margin for one unit of each of Banner Company's three products: A$,$

$B,$ and $C$ :

Due to a strike in the plant of one of its competitors, demand for the company's products far exceeds its capacity to produce.

Management is trying to determine which product$($s$)$ to concentrate on next week in filling its backlog of orders. The direct labour rate

is $$4$ per hour, and only $3,290$ hours of labour time are available each week.

Required:

Compute the amount of contribution margin that will be obtained per hour of labour time spent on each product. $($Round your

intermediate calculations to $1$ decimal place. Round your answers to $2$ decimal places.$)$

Which orders would you recommend that the company work on next week$-$the orders for product A$,$ product B$,$ or product C$?$

Product A

Product B

Product C

By paying overtime wages, more than $3,290$ hours of direct labour time can be made available next week. Up to how much should

the company be willing to pay per hour in overtime wages as long as there is unfilled demand for the three products? $($Do not round

intermediate calculations. Round your answer to $2$ decimal places.$)$