Unit contribution margin, contribution per labor-hour
Not what you're looking for?
Comfy Fit Company makes three sizes of shirts, small, medium and large, on one assembly line that has a limit of 600 labor-hours per week. Comfy Fit Company can seel all the shirts it can make under current operating capacity. Manufacturing information per shirt for each product is as follows:
Small Medium Large
Selling price $8 $12 $15
Variable costs 5 6 10
Labor hours per shirt 0.3 0.5 1.0
Requirements:
Determine the weekly contribution margin when all labor-hours are allotted to the product with the highest:
a. unit selling price.
b. unit contribution margin
c. contribution per labor-hour
Purchase this Solution
Solution Summary
Determines the weekly contribution margin when all labor-hours are allotted to the product with the highest: unit selling price, unit contribution margin and contribution per labor-hour
Solution Preview
Selling price Variable cost Unit Contribution Labour hrs per shirt Contribution per labor hr
Small $8 $5 $3 =8 - 5 0.3 $10.00 =3/0.3
Medium $12 $6 $6 =12 - 6 0.5 $12.00 =6/0.5
Large $15 $10 $5 =15 - 10 1 $5.00 =5/1
Requirements:
Determine the weekly contribution margin when all labor-hours are allotted to the product with the highest:
a. unit selling price.
Large has the highest unit selling price at $15
Contribution per labor ...
Purchase this Solution
Free BrainMass Quizzes
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Motivation
This tests some key elements of major motivation theories.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.