Carter Inc.produces two products,A and B.Pertinent data follow:
There is insufficient labor capacity in the plant to meet the combined demand for both products.Both products are produced through the same production departments.The fixed factory overhead rate is $10 per direct labor hour.
Required:
(1)Calculate the unit contribution margin for each product.
(2)Determine which product should be produced in priority,given the labor constraint,and explain why.
Please see Feedback for answers.

Question

Carter Inc.produces two products,A and B.Pertinent data follow:
  There is insufficient labor capacity in the plant to meet the combined demand for both products.Both products are produced through the same production departments.The fixed factory overhead rate is $10 per direct labor hour.
Required:
(1)Calculate the unit contribution margin for each product.
(2)Determine which product should be produced in priority,given the labor constraint,and explain why.
Please see Feedback for answers.

Quizplus · Accepted Answer

The Answer of Carter Inc.produces two products,A and B.Pertinent data follow:
  There is insufficient labor capacity in the plant to meet the combined demand for both products.Both products are produced through the same production departments.The fixed factory overhead rate is $10 per direct labor hour.
Required:
(1)Calculate the unit contribution margin for each product.
(2)Determine which product should be produced in priority,given the labor constraint,and explain why.
Please see Feedback for answers.

Carter Inc.produces Two Products,A and B.Pertinent Data Follow