e http:/lezto mheducation.com/hm.tpx pter 7 Homework -Connect. Chapter 7 Homewor
ID: 2508771 • Letter: E
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e http:/lezto mheducation.com/hm.tpx pter 7 Homework -Connect. Chapter 7 Homework -Conn..x Question 8 (of 8) 125 points glass window, cleverly named Products A. B, and C. Information about these products tolows Product A Produc B Produc C Cordova manufactures theee types of stained Sales price Variable costs per unit Fixed costs per unit Required number of labor hours 5 35 17 5 45 21 s 75 32 1 25 2.00 250 Cordova currently is limited to 40,000 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 de Product A ProductB Product C CM per DL Hour CM per DL Hour CM per DL. Hour Which product would be Cordova's first choice to produce? O Product C O Product A O Product B Hints Reterences eBook & Resources HinteExplanation / Answer
Answer
Working
A
B
C
A
Sales price
$ 35.00
$ 45.00
$ 75.00
B
Variable cost
$ 17.00
$ 21.00
$ 32.00
C=A-B
Contribution margin
$ 18.00
$ 24.00
$ 43.00
D
Required no. of labor hours
1.25
2
2.5
E=C/D [Answers]
Contribution margin per DL Hour
$ 14.40
$ 12.00
$ 17.20
Since, Product C has the highest CM per DLH of $17.2 in comparison to other Products, Product C will be the FIRST CHOICE. Hence, answer is Product C
Working
A
B
C
A
Sales price
$ 35.00
$ 45.00
$ 75.00
B
Variable cost
$ 17.00
$ 21.00
$ 32.00
C=A-B
Contribution margin
$ 18.00
$ 24.00
$ 43.00
D
Required no. of labor hours
1.25
2
2.5
E=C/D [Answers]
Contribution margin per DL Hour
$ 14.40
$ 12.00
$ 17.20
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