Problem:
Wood Carving Corporation manufactures three products. Because of a recent lack of skilled wood carvers, the corporation has had a shortage of available labor hours. The following per unit data relates to the three products of the corporation:
Letter Openers Elvis Statues Candle Holders
Sales price $31 $83 $65
Variable costs $19 $60 $17
Labor hours required 1 6 2
Assume that Wood Carving only has 1,810 labor hours available next month. Also assume that Wood Carving can only sell 800 units of each product in a given month. What is the maximum amount of contribution margin that Wood Carving can generate next month given this labor hour shortage?
- $53,290
- $40,920
- $46,740
- $34,150