Question
Hanson Corporation produces three products, and is currently facing a labor shortage; only 3,030 labor hours are available this month. The selling prices, costs, and
Hanson Corporation produces three products, and is currently facing a labor shortage; only 3,030 labor hours are available this month. The selling prices, costs, and labor requirements of the three products are as follows:
| Product A | Product B | Product C | |
|---|---|---|---|
| Sales price | $ 54.00 | $ 40.00 | $ 54.00 |
| Variable cost per unit | $ 42.00 | $ 13.00 | $ 33.00 |
| Direct labor hours per unit | 1.9 | 3.3 | 2.3 |
Required:
What is the contribution margin per unit for each product?
What is the contribution margin per direct labor hour for each product?
Assume Hanson has unlimited demand for each product. Which product should Hanson focus on producing?
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Swanson On Internal Auditing Raising The Bar
Authors: IT Governance Publishing
1st Edition
1849280673, 978-1849280679
