XYZ Company produces 3 different desk lamps. Each of the different lamps (Alpha, Beta, and...

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Accounting

XYZ Company produces 3 different desk lamps. Each of the different lamps (Alpha, Beta, and Delta) have different features and therefore take different amounts of time to produce. Product information for the lamps that XYZ Company produces is given below:
Utilization of a Constrained Resource
Product
Alpha Beta Delta
Selling Price $180 $210 $200
Variable Costs:
Direct Materials $40 $49 $37
Direct Labour $8.40 $8.40 $21.00
Variable Manufacturing Overhead $5 $10 $9
Total Variable Cost $53.40 $67.40 $67.00
Contribution Margin $126.60 $142.60 $133.00
Contribution Margin Ratio (Rounded)70.33%67.90%66.50%
Direct Labour Rate $14 $14 $14
Currently, the labour market in the region that XYZ Company operates in is very tight, and therefore available labour hours is the company's primary constraint.
Given the above information for XYZ Company and assuming there is only time to produce one product, which of the products should be prioritized first(based on the contribution per direct labour-hour)?
Question 46 options:
Beta
There is no difference between the 3 products.
Delta
Alpha

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