Duo Company manufactures two products, Uno and Dos. Contribution margin data follow. Uno Dos Unit sales $
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Question:
Duo Company manufactures two products, Uno and Dos. Contribution margin data follow.
Uno Dos
Unit sales $ $
Less variable cost:
Direct material $ $
Direct labor
Variable overhead
Variable selling and administrative cost
Total variable cost $ $
Unit contribution margin $ $
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:
Calculate the contribution margin per scarce resource for each of the products assuming an arbitrary time period for which direct laborers earn $ per unit.
Which of Duo Companys products is most profitable?
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