Question
Foster Corporation produces two products N P and Q. P sells for $4.00 per unit; Q sells for $5.25 per unit. Variable costs for P
Foster Corporation produces two products N P and Q. P sells for $4.00 per unit; Q sells for $5.25 per unit. Variable costs for P and Q are respectively, $2.50 and $2.95. There are 3,600 direct labor hours per month available for producing the two products. Product P requires 3 direct labor hours per unit and Product Q requires 4.5 direct labor hours per unit. Compute the following, include calculations:
A) Contribution margin per unit for each product
B) Contribution margin per direct labor hour for each product
C) The total number of products produced if only that product is produced each month
D) Income if only one product is produced and total production is sold
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