Lee-Vie Company has met all production requirements for the current month and has an opportunity to manufacture additional units with its excess capacity.Unit selling prices and unit costs for three product lines follow.
A.

When there is no limit on production capacity,Regular should be manufactured because it has the highest contribution margin per unit.
A.If Lee-Vie has excess machine capacity and can add more labor as needed (i.e. ,neither machine capacity nor labor is a constraint),which product is the most attractive to produce?
B.

When labor is in short supply,Plain should be manufactured because it has the highest contribution margin per direct labor hour.
B.If Lee-Vie has excess machine capacity but a limited amount of labor time available,which product or products should be manufactured in the excess capacity?

Question

Lee-Vie Company has met all production requirements for the current month and has an opportunity to manufacture additional units with its excess capacity.Unit selling prices and unit costs for three product lines follow.
A.
  
When there is no limit on production capacity,Regular should be manufactured because it has the highest contribution margin per unit. 
A.If Lee-Vie has excess machine capacity and can add more labor as needed (i.e. ,neither machine capacity nor labor is a constraint),which product is the most attractive to produce?
B.
  
When labor is in short supply,Plain should be manufactured because it has the highest contribution margin per direct labor hour. 
B.If Lee-Vie has excess machine capacity but a limited amount of labor time available,which product or products should be manufactured in the excess capacity?

Quizplus · Accepted Answer

The Answer of Lee-Vie Company has met all production requirements for the current month and has an opportunity to manufacture additional units with its excess capacity.Unit selling prices and unit costs for three product lines follow.
A.
  
When there is no limit on production capacity,Regular should be manufactured because it has the highest contribution margin per unit. 
A.If Lee-Vie has excess machine capacity and can add more labor as needed (i.e. ,neither machine capacity nor labor is a constraint),which product is the most attractive to produce?
B.
  
When labor is in short supply,Plain should be manufactured because it has the highest contribution margin per direct labor hour. 
B.If Lee-Vie has excess machine capacity but a limited amount of labor time available,which product or products should be manufactured in the excess capacity?

Lee-Vie Company Has Met All Production Requirements for the Current