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Cordova manufactures three types of stained glass windows, cleverly named Products A, B, and C. Information about these products follows:
Product A Product B Product C
Sales price $ 43.00 $ 53.00 $ 91.00
Variable costs per unit 19.90 22.60 35.90
Fixed costs per unit 5.00 5.00 5.00
Required number of labor hours 1.50 2.50 3.00
Cordova currently is limited to 45,000 labor hours per month.
Required:
1-a. Assuming an infinite demand for each of Cordovas products, determinecontribution margin per direct labor hour for each product.
1-b. Which product would be Cordova's first choice to produce?
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