Civic Company has the following projections for demands in the forthcoming year, alongside established selling prices and costs related to the production. Fixed costs pertain to the facility, which is allocated by the plant manager based on perceived usage. Direct Labor for production is at P20 per hour, while variable overhead is based on machine hours, applied at P10 per machine hour.
								Eds	Nic	Eve	Total
Demand	3,000	2,000	1,000
Selling Price	1,800,000	750,000	780,000
Direct Materials	300,000	135,000	195,000	630,000
Direct Labor	240,000	120,000	80,000	440,000
Variable Overhead	90,000	45,000	50,000	185,000
Fixed Overhead (Allocated)	160,000	120,000	120,000	400,000
TOTAL COST	790,000	420,000	445,000	1,655,000
a. If there are only 19,000 labor hours available, how many units of the item with least Contribution margin per scarce resource should be produced?
b. If there are only 15,000 machine hours available, how many units of the item with least Contribution margin per scarce resource should be produced?
c. If there are only 17,000 machine hours, and 14,000 labor hours available, how much would be the total contribution margin as a result of prioritization of usage of the scarce resource?
d. If there are only 17,000 machine hours, and 14,000 labor hours available, how many direct labor hours will be utilized in the production of product Eds?
e. If there are only 17,000 machine hours, and 14,000 labor hours available, what is the Contribution margin per scarce resource of the product with the highest priority?

Answer rating: 100% (QA)

a To determine how many units of the item with the least contribution margin per scarce resource should be produced given 19000 labor hours available calculate the contribution margin per unit for eac... View the full answer