Solved: Stand a requires 6 labor hours and stand b requires 3 labor, Accounting Basics

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Stand a requires 6 labor hours and stand b requires 3 labor

Exercise - Constraints

Dvorak Music produces two durable music stands:

                               Stand A           Stand B
Selling price               $90                   $80
Less variable costs       30                     44
Contribution margin    $60                   $36

Stand A requires 6 labor hours and stand B requires 3 labor hours. The company has 350 available labor hours per week. Further, the company can sell all it can produce of either product.

Required

a. Which stand(s) should the company produce?

b. What would be the incremental benefit of obtaining 15 additional labor hours?

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Accounting Basics: Stand a requires 6 labor hours and stand b requires 3 labor

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Accounting Basics: Stand a requires 6 labor hours and stand b requires 3 labor

Reference No:- TGS02620122

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