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Limited Resources Assume Fender produces only three guitars: the Stratocaster, Telecaster, and Jaguar. A limitation...

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Accounting

Limited Resources Assume Fender produces only three guitars: the Stratocaster, Telecaster, and Jaguar. A limitation of 960 labor hours per week prevents Fender from meeting the sales demand for these products. Product information is as follows:

Stratocaster Telecaster Jaguar
Unit selling price $1,200 $900 $1,400
Unit variable costs (630) (450) (850)
Unit contribution margin $570 $450 $550
Labor hours per unit 15 10 20

Required Determine the weekly contribution from each product when total labor hours are allocated to the product with the highest. 1. Unit selling price. 2. Unit contribution margin. 3. Contribution per labor hour. (Hint: Each situation is independent of the others.)

Highest Unit Selling Price Highest Contribution per Unit Highest Contribution per Labor Hour
AnswerJaguarStatocasterTelecaster

AnswerJaguarStatocasterTelecaster

AnswerJaguarStatocasterTelecaster

Labor hours available Answer

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Labor hours per unit Answer

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Weekly production Answer

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Unit contribution margin Answer

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Weekly contribution Answer

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