Problem
Surf Company can sell all of the two surfboard models it produces, but it has only 404 direct labor hours available. The Glide model requires 2 direct labor hours per unit. The Ultra model requires 4 direct labor hours per unit. Contribution margin per unit is $204 for Glide and $308 for Ultra.
(i) Compute the contribution margin per direct labor hour for each product.
(ii) Determine the best sales mix and the resulting contribution margin.