what did i do wrong on this: Limited Resources Assume Fender produces only three

Question

what did i do wrong on this:

Limited Resources Assume Fender produces only three guitars: the Stratocaster, Dreadnought and Telecaster. A limitation of 720 labor hours per week prevents Fender from meeting the sales demand for these products. Product information is as follows: Stratocaster Dreadnought Telecaster 5882 756) 5126 36 Unit selling price $672 (420) 5252 36 Unit variable costs 210) 5210 Unit contribution margin Labor hours per unit Required Determine the weekly contribution from each product when total labor hours are allocated to the product with the highest. 1. Unit selling price. 2. Unit contribution margin. 3. Contribution per labor hour (Hint: Each situation is independent of the others.) Highest Unit Highest Contribution Highest Contribution Selling Price per Unit per Labor Hour Dreadnought # Telecaster Labor hours available 720 Labor hours per unit 36 24 36 Weekly production 20 30 20 Unit contribution margin 252 S 210 126 5,040S 6,300$ 2,520 Weeky contribution Determine the opportunity cost the company will incur if management requires the weekly production of 20 Telecasters. S 3,780

Explanation / Answer

Highest Highest Highest Unit SP CM per unit CM per hour Telecaster Stratocaster Dreadnought Labour hours available 720 720 720 Labour hour per unit 36 36 24 Weekly production 20 20 30 Unit contribution margin 126 252 210 Weekly contribution 2520 5040 6300 Opportunity cost: Loss of highest contribution which the company earn 6300 (by producing Dreadnought) Less: Contribution earned by producing Telecaster 2520 Opportunity cost of producing Telecaster 3780

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