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Morris Manufacturing produces and sells Widgets and Gizmos. Widgets have a contribution margin per unit of $30 and require 2 hours of direct labor while
Morris Manufacturing produces and sells Widgets and Gizmos. Widgets have a contribution margin per unit of $30 and require 2 hours of direct labor while Gizmos have a contribution margin of $39 and require 3 hours of direct labor. In the short run, how should the company choose which product to produce and sell I'd direct labor hours are a conatraint? Assuming there is sufficient demand for each product, which of the above products should the company maximize production of first?
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