Problem: Comfy Fit Company makes three sizes of shirts, small, medium and large, on one assembly line that has a limit of 600 labor-hours per week. Comfy Fit Company can seel all the shirts it can make under current operating capacity. Manufacturing information per shirt for each product is as follows:
Small Medium Large
Selling price $8 $12 $15
Variable costs 5 6 10
Labor hours per shirt 0.3 0.5 1.0
Requirements:
Determine the weekly contribution margin when all labor-hours are allotted to the product with the highest:
a. unit selling price.
b. unit contribution margin
c. contribution per labor-hour