Limited Resources Assume Fender produces only three guitars: the Stratocaster, Dreadnought and Telecaster. A limitation of 720 labor hours per week prevents Fender from meeting the sales demand for these products. Product information is as follows: Stratocaster Dreadnought Telecaster $1,260 (300) (1,080) $180 $960 (600) $360 Unit selling price $600 Unit variable costs $300 Unit contribution margin Labor hours per unit 36 24 36 Required Determine the weekly contribution from each product when total labor hours are allocated to the product with the highest. 1. Unit selling price 2. Unit contribution margin 3. Contribution per labor hour (Hint: Each situation is independent of the others.) Highest Unit Selling Price Highest Contribution per Unit Highest Contribution per Labor Hour Telecaster # Statocaster Dreadnought #V Labor hours available 720 720 720 Labor hours per unit 36 Weekly production 20 20 30 Unit contribution margin $ 180 360$ 300 Weekly contribution 3,600 7,200 9,000 Determine the opportunity cost the company will incur if management requires the weekly production of 20 Telecasters 3,600 x