Cordova manufactures three types of stained glass windows, cleverly named Products A$,$ B$,$ and C$.$ Information about these products follows:

Product A Product B Product C

Sales price $ $48\mathrm{.}00$ $ $58\mathrm{.}00$ $ $102\mathrm{.}00$

Variable costs per unit $15\mathrm{.}2023\mathrm{.}6023\mathrm{.}20$

Fixed costs per unit $4\mathrm{.}004\mathrm{.}004\mathrm{.}00$

Required number of labor hours $2\mathrm{.}002\mathrm{.}504\mathrm{.}00$

Cordova currently is limited to $60,000$ labor hours per month.

Required:

$1-$a$.$ Assuming an infinite demand for each of Cordova$’$s products, determine contribution margin per direct labor hour for each product.

$1-$b$.$ Which product would be Cordova's first choice to produce?

 

Answer rating: 100% (QA)

Answer 1a To determine the contribution margin per direct labor hour for each product we first need ... View the full answer