The Gant Company produces three items in its manufacturing plant.  The plant has a total capacity of 9,600 minutes per month for production.  The following information is provided for the products:

	Products
	X	Y	Z
Direct material	$16	$10	$14
Direct labor (all variable)	15	14	15
Variable overhead	2	3	4
Fixed overhead	20	23	30
Unit cost	$53	$50	$63
Minutes required per unit	5	4	6
Selling price per unit	$70	$65	$80
Variable selling expense per unit	$5	$4	$2
Monthly demand in units	2,200	1,000	800

 

Required:

 

1. Calculate the contribution margin produced if the # of units determined in part (b) are produced.
2. What is the opportunity cost of the capacity constraint?

Answer rating: 100% (QA)

To calculate the contribution margin produced we need to determine the number of units produced for each product based on the monthly demand Given the ... View the full answer