Question
Sticker Company makes five models of a hockey stick: Wood, Rubber, Plastic, Styrofoam and Platinum. Data for one unit of each type of stick follows:
Sticker Company makes five models of a hockey stick: Wood, Rubber, Plastic, Styrofoam and Platinum. Data for one unit of each type of stick follows: Price Less variable expenses: Direct materials Direct labour Overhead Total variable expenses Contribution margin Wood Rubber Plastic Styrofoam Platinum $ 248.00 $ 264.88 $ 299.00 $ 320.88 $ 331.20 $ 80.00 $ 88.00 $ 100.00 $ 112.00 $ 120.00 $ 40.00 $ 44.00 $ 50.00 $ 56.00 $ 60.00 $ 56.00 $ 61.60 $ 70.00 $ 78.40 $ 84.00 $ 176.00 $ 193.60 $ $ 72.00 $ 71.28 $ 220.00 79.00 $ $ 246.40 $ 264.00 74.48 $ 67.20 Direct labour workers are paid $10 per hour. Next quarter, the company has a capacity of 4,000 direct labour hours. There is unlimited demand for the company's products, so they can sell all that they produce. Part 1. In order to maximize contribution margin, which product should the company produce? A) Wood B) Rubber C) Plastic D) Styrofoam E) Platinum Part 2. If the company produces only one product, what is the maximum total contribution margin it can earn? $85,600 $72,000 A) B) C) $63,200 D $78,400 E) $53,200 F) $64,800 G) $44,800
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