Cordova manufactures three types of stained glass window,
cleverly named Products A, B, and C. Information about these
products follows:
Cordova currently is limited to 60,000 labor hours per month.
Required:
Assuming an infinite demand for each of Cordova’s products, determine contribution margin per direct labor hour. (Round your answers to 2 decimal places.)
Which product would be Cordova's first choice to produce?
| Product A | Product B | Product C | ||||
| Sales price | $ | 50.00 | $ | 60.00 | $ | 90.00 |
| Variable costs per unit | 16.40 | 11.25 | 24.40 | |||
| Fixed costs per unit | 6.00 | 6.00 | 6.00 | |||
| Required number of labor hours | 2.00 | 2.50 | 4.00 | |||
Cordova currently is limited to 60,000 labor hours per month.
Required:
Assuming an infinite demand for each of Cordova’s products, determine contribution margin per direct labor hour. (Round your answers to 2 decimal places.)
Which product would be Cordova's first choice to produce?
-
Product C
-
Product B
-
Product A
