Limited Resources Assume Fender produces only three guitars: the Stratocaster, Telecaster, and Jaguar. A limitation...
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Limited Resources Assume Fender produces only three guitars: the Stratocaster, Telecaster, and Jaguar. A limitation of 960 labor hours per week prevents Fender from meeting the sales demand for these products. Product information is as follows:
Stratocaster
Telecaster
Jaguar
Unit selling price
$1,200
$900
$1,400
Unit variable costs
(630)
(450)
(850)
Unit contribution margin
$570
$450
$550
Labor hours per unit
15
10
20
Required Determine the weekly contribution from each product when total labor hours are allocated to the product with the highest. 1. Unit selling price. 2. Unit contribution margin. 3. Contribution per labor hour. (Hint: Each situation is independent of the others.)
Highest Unit Selling Price
Highest Contribution per Unit
Highest Contribution per Labor Hour
AnswerJaguarStatocasterTelecaster
AnswerJaguarStatocasterTelecaster
AnswerJaguarStatocasterTelecaster
Labor hours available
Answer
Answer
Answer
Labor hours per unit
Answer
Answer
Answer
Weekly production
Answer
Answer
Answer
Unit contribution margin
Answer
Answer
Answer
Weekly contribution
Answer
Answer
Answer
Answer & Explanation
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