In order to maximise total contribution margin for the month, determine how many units of...
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Accounting
In order to maximise total contribution margin for the month, determine how many units of each product Sounds of Music should produce. Provide supporting calculations.
If an additional 700 direct labour hours for the month is obtained, specify which instrument the hours would be used on, and calculate the incremental benefit to Sounds of Music.
Constrained Resources Sounds of Music currently produces three types of musical instruments. Per unit sales and cost information are as follows: Guitar $600 $420 $10 15 hours 900 Violin $1,700 $1,052 Sales price Variable costs Fixed costs Labour hours per unit Monthly demand in units $40 Banjo $530 $404 $23 14 hours 250 18 hours 550 The company has only 25,000 direct labour hours available per month for production
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