The following are the selling price, variable costs, and contribution margin for one unit of each of Banner Company's three products: A, B, and C: Selling price Variable costs: Direct materials Direct labour Variable manufacturing overhead Total variable cost Contribution margin. Contribution margin ratio A $150.00 Contribution margin per labour hour 101.25 15.00 3.75 120.00 $30.00 20% A Product B $120.00 21.50 50.00 12.50 84.00 $36.00 30% B с $140.00 Due to a strike in the plant of one of its competitors, demand for the company's products far exceeds its capacity to produce. Management is trying to determine which product(s) to concentrate on next week in filling its backlog of orders. The direct labour rate is $10 per hour, and only 3,280 hours of labour time are available each week. 75.80 20.00 5.00 Required: 1. Compute the amount of contribution margin that will be obtained per hour of labour time spent on each product. (Round your intermediate calculations to 1 decimal place. Round your answers to 2 decimal places.) C 100.80 $39.20 28%
The following are the selling price, variable costs, and contribution margin for one unit of each of Banner Company's three products: A, B, and C: Selling price Variable costs: Direct materials Direct labour Variable manufacturing overhead Total variable cost Contribution margin. Contribution margin ratio A $150.00 Contribution margin per labour hour 101.25 15.00 3.75 120.00 $30.00 20% A Product B $120.00 21.50 50.00 12.50 84.00 $36.00 30% B с $140.00 Due to a strike in the plant of one of its competitors, demand for the company's products far exceeds its capacity to produce. Management is trying to determine which product(s) to concentrate on next week in filling its backlog of orders. The direct labour rate is $10 per hour, and only 3,280 hours of labour time are available each week. 75.80 20.00 5.00 Required: 1. Compute the amount of contribution margin that will be obtained per hour of labour time spent on each product. (Round your intermediate calculations to 1 decimal place. Round your answers to 2 decimal places.) C 100.80 $39.20 28%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Vishanu
Transcribed Image Text:The following are the selling price, variable costs, and contribution margin for one unit of each of Banner Company's three products: A,
B, and C:
Selling price
Variable costs:
Direct materials.
Direct labour
Variable manufacturing overhead
Total variable cost
Contribution margin.
Contribution margin ratio
A
$150.00
Contribution margin per labour hour
101.25
15.00
3.75
120.00
$30.00
20%
A
Product
B
$120.00
21.50
50.00
12.50
84.00
$36.00
30%
B
с
$140.00
Due to a strike in the plant of one of its competitors, demand for the company's products far exceeds its capacity to produce.
Management is trying to determine which product(s) to concentrate on next week in filling its backlog of orders. The direct labour rate
is $10 per hour, and only 3,280 hours of labour time are available each week.
75.80
20.00
5.00
Required:
1. Compute the amount of contribution margin that will be obtained per hour of labour time spent on each product. (Round your
intermediate calculations to 1 decimal place. Round your answers to 2 decimal places.)
C
100.80
$39.20
28%
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