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Determine the contribution margin per labour hour

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Question - The USB drive requires 2 labour hours to manufacture, while the wireless modem requires 5 labour hours. Demand for the USB drives is estimated to be 45,000 units while demand for wireless modems is estimated to be 27,000 units. To meet demand for both products would require 225,000, labour hours, but the maximum capacity for OMG Wifmod Ltd is 150,000 labour hours per year.

Determine the contribution margin per labour hour for each product and then calculate how many USB drives and modems must be sold to maximise profit, i.e. the optimum product mix.

Reference no: EM132476543

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