Adorn Furniture manufactures a small table and a large table.The small table sells for $900,has variable costs of $540 per table,and takes 10 direct labor hours to manufacture.The large table sells for $1500,has variable costs of $980,and takes eight direct labor hours to manufacture.Calculate the contribution margin per direct labor hour for the small table.

Question

Quizplus · Accepted Answer

To calculate the contribution margin per direct labor hour for the small table, we first need to calculate the contribution margin for one small table:

Contribution margin = Selling price - Variable cost 
Contribution margin = $900 - $540 
Contribution margin = $360

Then, we need to calculate the contribution margin per direct labor hour:

Contribution margin per direct labor hour = Contribution margin / Direct labor hours 
Contribution margin per direct labor hour = $360 / 10 
Contribution margin per direct labor hour = $36

Therefore, the correct answer is C.

Adorn Furniture Manufactures a Small Table and a Large Table