Need help with limited resource question

costs $12 per liter. It costs $100 to convert 100 liters of D into 60 liters of E and 40 liters of F. Product F can be sold immediately for $12 per liter or processed further into ProductGat a additional cost of $10 per liter. Product G can then be sold for $26 per liter Required Determine whether Product F should be sold or processed further into Product G. E4-25. Limited Resources Assume Fender produces only three guitars: the Stratocaster, Dreadnought and Telecaster. A limitation of 720 In or hours per week prevents Fender from meeting the sales demand for these products. Product informauon is as follows: Telecaster $1,260 S 180 Stratocaster Dreadnought Unit scheie arice. . Unit variae oosts... $600 (300) $300 24 $960 $360 36 36 Required a. Determine the weekly contribution from each product when total labor hours are allocated to the product with the highest 1. Unit selling price. 2. Unit contribution margin. 3. Contribution per labor hour. Hint: Each situation is independent of the others.) b. What generalization can be made regarding the allocation of limited resources to achieve short-run c. Determine the opportunity cost the company will incur if management requires the weekly produc- d. Give reasons why a company may not allocate resources in the most economical way in some profit maximization? tion of 20 Telecasters. situations