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?