Hawbaker Company manufactures two styles of mops, Wood and Steel. The following information is available: Hawbaker can sell a maximum of 5,000 units of each style of mop. Labour hour capacity for the year is 20,000 hours.
Required:
a. Which style has the highest contribution margin per unit?
b. Which style has the highest contribution margin per hour?
c. How many of each style of mop would Hawbaker have to produce to maximize income? What would the maximum income level be?

Question

Hawbaker Company manufactures two styles of mops, Wood and Steel. The following information is available:  Hawbaker can sell a maximum of 5,000 units of each style of mop. Labour hour capacity for the year is 20,000 hours.
Required:
a. Which style has the highest contribution margin per unit?
b. Which style has the highest contribution margin per hour?
c. How many of each style of mop would Hawbaker have to produce to maximize income? What would the maximum income level be?

Quizplus · Accepted Answer

The Answer of Hawbaker Company manufactures two styles of mops, Wood and Steel. The following information is available:  Hawbaker can sell a maximum of 5,000 units of each style of mop. Labour hour capacity for the year is 20,000 hours.
Required:
a. Which style has the highest contribution margin per unit?
b. Which style has the highest contribution margin per hour?
c. How many of each style of mop would Hawbaker have to produce to maximize income? What would the maximum income level be?

Hawbaker Company Manufactures Two Styles of Mops, Wood and Steel