Lemke Company sells crowns, fancy crowns and jeweled crowns. The factory is experiencing a bottleneck in...

 

Transcribed Image Text:

Lemke Company sells crowns, fancy crowns and jeweled crowns. The factory is experiencing a bottleneck in direct labor hours and is trying to determine which item is more profitable. Sales price Variable cost per item Direct Labor Hours needed REQUIRED: Crowns $10.00 $2.50 1 hour Fancy Crowns Jeweled Crowns $22.50 $6.00 2.5 hours $30.00 $10.00 2 hours (a) Calculate the contribution margin per hour per item. (b) Determine which items the company should try to sell more of first, second, and then last. Lemke Company sells crowns, fancy crowns and jeweled crowns. The factory is experiencing a bottleneck in direct labor hours and is trying to determine which item is more profitable. Sales price Variable cost per item Direct Labor Hours needed REQUIRED: Crowns $10.00 $2.50 1 hour Fancy Crowns Jeweled Crowns $22.50 $6.00 2.5 hours $30.00 $10.00 2 hours (a) Calculate the contribution margin per hour per item. (b) Determine which items the company should try to sell more of first, second, and then last.

Answer rating: 100% (QA)

a Calculate the contribution margin per hour per item Crowns Sales Price 10 Variable Cos... View the full answer