Question
Kiley produces two products that require a limited resource, direct labor hours. Hammers have a unit selling price of $300, a unit contribution margin of
Kiley produces two products that require a limited resource, direct labor hours. Hammers have a unit selling price of $300, a unit contribution margin of $100 and a contribution margin per direct labor hour of $300. Screwdrivers have a unit selling price of $250, a unit contribution margin of $200 and a contribution margin per direct labor hour of $280. Which product should she devote the limited resource to? Select answer from the options below a. The screwdrivers, because the unit variable cost is less than the hammers. b. The hammers, because unit selling price is greater than the screwdrivers. c. The screwdrivers, because the unit contribution margin is greater than the hammers. d. The hammers, because the contribution margin per unit of limited resource is greater than the screwdrivers.
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