Thorne Company manufactures and sells three products. Relevant per unit data concerning each product are given below.

Instructions
(a) Compute the contribution margin per unit of the limited resource (machine hours) for each product.
(b) Assuming 1,500 additional machine hours are available, which product should be manufactured?
(c) Prepare an analysis showing the total contribution margin if the additional hours are
(1) Divided equally among the products,
(2) Allocated entirely to the product identified in (b)above.

Transcribed Image Text:

Product 1 Selling price Variable costs and expenses $3 Machine hours to produce 2 $9 12 $1 $9.50 $12