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Darren Company Produces Three Products with the Following Costs and Selling

Question 84

Multiple Choice

Darren Company produces three products with the following costs and selling prices:
\quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad  Products \text { Products }
XYZ Selling price per unit $40$30$35 Variable costs per unit 241620 Contribution margin per unit $16$14$15 Direct labor hours per unit 423 Machine hours per unit 574\begin{array}{lrrrrr}&\text {X}&\text {Y}&\text {Z}\\\text { Selling price per unit } & \$ 40 & \$ 30 & \$ 35 \\\text { Variable costs per unit } & 24 & 16 & 20 \\ \text { Contribution margin per unit } & \$ 16 & \$ 14 & \$ 15\\\text { Direct labor hours per unit } & 4 & 2 & 3 \\\text { Machine hours per unit } & 5 & 7 & 4\end{array}

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If Darren has a limit of 20,000 direct labor hours but no limit on units sold or machine hours, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:


A) X, Y, Z.
B) Y, Z, X.
C) X, Z, Y.
D) Z, Y, X.

Correct Answer:

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