Answered

Welcome to Westonci.ca, where your questions are met with accurate answers from a community of experts and enthusiasts. Get quick and reliable solutions to your questions from a community of seasoned experts on our user-friendly platform. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.

Solve the following problem:

Incorporation produces three products: Product A, Product B, and Product C. Product A requires 8 labor hours per unit to be completed. The company's labor hours are limited to 60,000 hours. The information related to these products is as follows:

\begin{tabular}{|l|c|c|c|}
\hline
Particulars & Product A & Product B & Product C \\
\hline
Selling Price per unit & \[tex]$ 1,400 & \$[/tex] 1,800 & \[tex]$ 1,500 \\
\hline
Variable cost per unit & \$[/tex] 800 & \[tex]$ 1,200 & \$[/tex] 1,000 \\
\hline
\end{tabular}

Calculate the contribution margin per unit of constrained labor hours for Product B.

Sagot :

GinnyAnswer
To calculate the contribution margin per unit of constrained resource (labor hours) for Product B, follow these steps:

1. Identify the selling price per unit for Product B:
- Selling Price per unit for Product B: \[tex]$1,800 2. Identify the variable cost per unit for Product B: - Variable Cost per unit for Product B: \$[/tex]1,200

3. Calculate the contribution margin per unit for Product B:
- Contribution Margin = Selling Price per unit - Variable Cost per unit
- Contribution Margin = \[tex]$1,800 - \$[/tex]1,200
- Contribution Margin = \[tex]$600 4. Determine the number of labor hours required per unit for Product B: - Labor hours per unit for Product B: 6 hours 5. Calculate the contribution margin per hour for Product B: - Contribution Margin per Hour = Contribution Margin per unit / Labor hours per unit - Contribution Margin per Hour = \$[/tex]600 / 6 hours
- Contribution Margin per Hour = \[tex]$100.0 Therefore, the contribution margin per unit of constrained resource (labor hours) for Product B is \$[/tex]100.0 per hour.
We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.