Wright, Inc. produces three products. Data concerning the selling prices and uni

Question

Wright, Inc. produces three products. Data concerning the selling prices and unit costs of the three products appear below Selling price Variable costs Fixed costs Tapping machine time (minutes) Product C DE $ 60 $40 $70 $25 $15 $30 50 5 47 10 55 Fixed costs are applied to the products on the basis of direct labor hours. Demand for the three products exceeds the company's productive capacity. The tapping machine is the constraint, with only 2,700 minutes of tapping machine time available this week. Required: a-1. Calculate the contribution margin per minute for all three products. (Round your answers to 2 decimal places.)

Explanation / Answer

Calculate contribution margin per minutes :

b) Product E should be emphasis.

c) Maximum contribution margin = 2700*8 = 21600

C D E Sale price per unit 60 40 70 Variable cost per unit 25 15 30 Contribution margin per unit 35 25 40 Minutes per unit 10 5 5 Contribution margin per minutes 3.50 5.00 8.00

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