Compute the contribution margin per unit

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Reference no: EM13784791

Spencer Company manufactures and sells three products. Relevant per unit data concerning each product are given below.

Product

A B C

Selling price $9 $12 $14

Variable costs and expenses $3 $9.50 $12

Machine hours to produce 2 1 2

Instructions:

(a) Compute the contribution margin per unit of the limited resource (machine hour) for each product.

(b) Assuming 1,500 additional machine hours are available, which product should be manufactured?

(1) divided equally among the products.

(2) Allocated entirely to the product identified in the section above

Reference no: EM13784791

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