E7-11 Making Decisions Involving Constrained Resource [LO 7-2, 7-7] Cordova manu

Question

E7-11 Making Decisions Involving Constrained Resource [LO 7-2, 7-7] Cordova manufactures three types of stained glass window, cleverly named Products A, B, and C. Information about these products follows Sales price Variable costs per unit Fixed costs per unit Required number of labor hours ProductA $41.00 20.00 9.00 1.50 Product EB $51.00 13.50 9.00 2.50 Product C $81.00 34.50 9.00 3.00 Cordova currently is limited to 45,000 labor hours per month. Required Assuming an infinite demand for each of Cordova's products, determine contribution margin per direct labor hour. (Round your answers to 2 decimal place.) Contribution Margin Product A ProductB ProductC CM per DL Hour CM per DL Hour CM per DL Hour

Explanation / Answer

Product A Product B Product C Sales price 41 51 81 Variable costs per unit 20 13.5 34.5 Contribution margin per unit 21 37.5 46.5 Required number of labor hours 1.5 2.5 3 Contribution margin per labor hour 14 15 15.5

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