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Service Emphasis The following analysis of selected data is for each of the two services Rockville Corporation provides. Service G Service H Per-unit data at
Service Emphasis The following analysis of selected data is for each of the two services Rockville Corporation provides. Service G Service H Per-unit data at 10,000 services Sales price Service costs: Variable Fixed Selling and administrative expenses: Variable Fixed $31 $18 In the Rockville's operation, labor capacity is the company's constraining resource. Each unit of G requires 3 hours of labor, and each unit of H requires 1 hours of labor. Assuming that all services can be sold at a normal price, prepare an analysis showing which of the two services should be provided with any unused productive capacity that Rockville might have. Service Revenue Less: Variable cost Labor hours per unit Contribution margin per labor hour Any unused capacity should be devoted to Service H, which has $2 less contribution margin per labor hour than does Service G. Any unused capacity should be devoted to Service G, which has $2 more contribution margin per labor hour than does Service H. Any unused capacity should be devoted to Service H, which has $2 more contribution margin per labor hour than does Service G. Check
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