Cordova manufactures three types of stained glass window, cleverly named Product
ID: 2555775 • Letter: C
Question
Cordova manufactures three types of stained glass window, cleverly named Products A, B, and C. Information about these products follows Sales price Variable costs per unit Fixed costs per unit Required number of labor hours Product A $36.00 18.50 4.00 1.25 Product B $46.00 21.00 4.00 2.00 Product C $76.00 38.50 4.00 2.50 Cordova currently is limited to 40,000 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 place.) Contribution Margin Product A Product B Product C CM per DLHour CM per DLHour CM per DL Hour Which product would be Cordova's first choice to produce? Product B Product A Product CExplanation / Answer
Contribution margin per labour hour :
Product C would be first choice to produce.
Product A Product B Product C Sale price per unit 36 46 76 variable cost per unit 18.50 21 38.50 Contribution margin per unit 17.50 25 37.50 Labour hour per unit 1.25 2 2.50 Contribution margin per labour hour 14 12.50 15