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The Madison Corporation produces three products with the following unit costs and unit selling prices and hours of resource used per unit: Product A B
The Madison Corporation produces three products with the following unit costs and unit selling prices and hours of resource used per unit:
Product | A | B | C |
Selling price | $16 | $21 | $21 |
Variable Cost | $ 7 | $11 | $13 |
Contribution Margin | $ 9 | $10 | $ 8 |
Direct labor hours | 1.0 | 1.5 | 2.0 |
Machine hours | 4.5 | 2.0 | 2.5 |
If direct labor-hours is the company's production constraint, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:
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