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. Produdct information is as follows: Stratocaster Dreadnoug ht Telecaster Unit selling price. Unit variable costs. Unit contribution margin. $960 600) $360 36 $600 (300) $300 24 $1,260 (1,080) $ 180 36 Required a. 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.) b. What generalization can be made regarding the allocation of limited resources to achieve short-run c. Determine the opportunity cost the company will incur if management requires the weekly produc- d. Give reasons why a company may not allocate resources in the most economical way in some profit maximization? tion of 20 Telecasters situations