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Marvis Lumber Mill produces large wooden beams for construction. Lately, a labor shortage has caused the amount of direct labor hours to diminish to a
Marvis Lumber Mill produces large wooden beams for construction. Lately, a labor shortage has caused the amount of direct labor hours to diminish to a point where production will likely fall next quarter. Production supervisors are also worried that one of the saw mills may not make it to the end of the quarter, resulting in a reduction of machine hours. Data for Marvis Lumber Mill's products are below: Product Douglas Fir Cedar Oak White Pine Hemlock Price $ 80 $ 160 $ 120 $ 50 $ 220 Variable Cost $ 35 $ 110 $ 55 $ 18 $ 120 Labor Hours per Unit 0.2 0.3 0.25 0.4 0.5 Machine Hours per Unit 1 2 1.5 0.5 5 Demand for the Quarter 20,000 9,000 15,000 12,000 5,000 Available Labor Hours 14,000 Available Machine Hours 75,000 Required: Determine the total contribution for each type of beam if direct labor hours are likely to diminish due to a labor shortage. Determine the total contribution for each type of beam if one of the saw mills could not make it to the end of the quarter, resulting in a reduction of machine hours
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