Footballs Galore produces both pigskin and artificial leather footballs that are

Question

Footballs Galore produces both pigskin and artificial leather footballs that are stitched by one of two machines. Selected data related to producing a batch of 10 footballs for each product follow. Sales Price: $500 (Pig Skin) vs $250 (artificial leather) Direct materials $150 (Pig Skin) vs $50 (artificial leather) Direct Labor $45 (Pig Skin) vs $40 (artificial leather) Variable Overhead $30 (Pig Skin) vs $20 (artificial leather) Stitching Hours 2 (Pig Skin) cs 1 (artificial leather) Only two machines are capable of stitching the footballs. They have a maximum capacity of 3,000 total stitching hours per year. A.What is the contribution margin per limited resource for each type of football? Contribution margin Pig-skin football: $? per unit Artificial leather football: $? per unit B. Determine the contribution margin per sticthing hour that each football type generates. Contribution margin Pig-Skin Footballs: (Round to nearest cent.) $ per stitching hour Artificial Leather Footballs: $ per stitching hour

Explanation / Answer

a. Contribution margin Pig-skin football = 500 - 150 -45-30 =$275 per unit Contribution margin Artificial leather football = 250-50 -40-20 =140 per unit B. contribution margin per sticthing hour Pig-skin football =275/2=$137.5 per stitching hour Artificial Leather Footballs = 140 /1 = $140 per stitching hour

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