Duo Company manufactures two products, Uno and Dos. Contribution margin data follow. Duo Companys production process uses
Question:
Duo Companys production process uses highly skilled labor, which is in short supply. The same employees work on both products and earn the same wage rate.
Required:
Which of Duo Companys products is more profitable?Explain.
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Uno Dos $31.00 Unit sales price Less variable cost: $13.00 Direct material Direct labor Variable overhead Variable selling and administrative cost 1.00 1.25 75 $10.00 $3.00 7.00 $5.00 6.00 7.50 50 $19.00 $12.00 Total variable cost Unit contribution margin
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