Cordova manufactures three types of stained glass windows, cleverly named Products A, B, and C. Information about these products follows: Product A $ 49.00 Product B $ 59.00 15.80 23.80 5.00 Product C $ 104.00 23.80 2.50 5.00 4.00 Sales price Variable costs per unit Fixed costs per unit Required number of labor hours 5.00 2.00 Cordova currently is limited to 60,000 labor hours per month. Required: 1-a. Assuming an infinite demand for each of Cordova's products, determine contribution margin per direct labor hour for each product. 1-b. Which product would be Cordova's first choice to produce?
Cordova manufactures three types of stained glass windows, cleverly named Products A, B, and C. Information about these products follows: Product A $ 49.00 Product B $ 59.00 15.80 23.80 5.00 Product C $ 104.00 23.80 2.50 5.00 4.00 Sales price Variable costs per unit Fixed costs per unit Required number of labor hours 5.00 2.00 Cordova currently is limited to 60,000 labor hours per month. Required: 1-a. Assuming an infinite demand for each of Cordova's products, determine contribution margin per direct labor hour for each product. 1-b. Which product would be Cordova's first choice to produce?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cordova manufactures three types of stained glass windows, cleverly named Products A, B, and C. Information about these products
follows:
Fixed costs per unit
Sales price
Variable costs per unit
Required number of labor hours
Product A
$ 49.00
Product B
$ 59.00
Product C
$ 104.00
15.80
5.00
2.00
23.80
5.00
23.80
2.50
5.00
4.00
Cordova currently is limited to 60,000 labor hours per month.
Required:
1-a. Assuming an infinite demand for each of Cordova's products, determine contribution margin per direct labor hour for each
product.
1-b. Which product would be Cordova's first choice to produce?
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