3. Constrained resources EagleEye Company makes two sizes of computer monitors:

Question

3. Constrained resources EagleEye Company makes two sizes of computer monitors: 17-inch and 19-inch. Due to a labor strike, only 880 direct labor hours will be available next week. The information is listed below Selling price per unit Variable costs per unit Direct labor hours per unit Units ordered for next week 17-inch $375 210 10 125 19-inch S350 $330 a. The coatribution margin per unit of constrained resource is Ans: S per unit of direct labor hour for 17-inch monitor Ans: S b. How many units of 17-inch and 19-inch monitors should EagleEye produce? Ans: units of 17-inchmonitor and units of 19-inch monitor Yea!! No quizzes

Explanation / Answer

17-inch 19-inch Selling price per unit 375 550 Variable cost per unit 210 330 Contribution margin per unit 165 220 Direct labor hours per unit 10 11 Contribution margin per unit of constrained resource 16.5 20 b Units of 19 inch monitor = 880/11 = 88 Units of 17 inch monitor = 0

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