Incremental benefit of obtaining additional labor hours


Dvorak Music produces two durable music stands:

                          Stand A Stand B
Selling price            $90    $80
Less variable costs    30     44
Contribution margin $60    $36

Stand A requires 6 labor hours and stand B requires 3 labor hours.The company has only 350 available labor hours per week. Further, the company can sell all it can produce of either product.

Required:

a. Which stand(s) should the company produce?

b. What would be the incremental benefit of obtaining 15 additional labor hours?

Solution Preview :

Prepared by a verified Expert
Other Management: Incremental benefit of obtaining additional labor hours
Reference No:- TGS01969801

Now Priced at $25 (50% Discount)

Recommended (99%)

Rated (4.3/5)