Question
Home ModelDeluxe ModelPro Model Selling price ...............................$58$65$80 Direct material ........................... 162019 Direct labor ($10 per hour) ...101520 Variable overhead ..................... 8 1216 Fixed overhead .........................
Home ModelDeluxe ModelPro Model
Selling price ...............................$58$65$80
Direct material ........................... 162019
Direct labor ($10 per hour) ...101520
Variable overhead ..................... 8 1216
Fixed overhead ......................... 16515
1. If Carpenter's Mate, Inc. has excess machine capacity and can add more labor as needed (i.e., neither machine capacity nor labor is a constraint), the excess production capacity should be devoted to producing which product? (Assume that the excess capacity will be used for a single product line.)
2. If Carpenter's Mate has excess machine capacity but a limited amount of labor time, the excess production capacity should be devoted to producing which product or products? if the Contribution margin per direct-labor hour, Deluxe Model: $12
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