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What is the margin on total variable cost of product a

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Question - IKS has a production capacity of 5,000 hours that can be used to produce products A or B. The following data is available:

Product A

Product B

Unit selling price

27$

30$

Unit raw material

9$

7$

Unit direct (variable) labour

5$

5$

Indirect unit variable manufacturing costs

3$

6.50$

Unit fixed manufacturing indirect costs

7$

5$

Production time

2 hours

0.5 hours

Required - If the company chooses to manufacture only A, what is the margin on total variable cost of product A taking into account the constraint (5,000 hours)?

Reference no: EM133168659

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