Question

please provide formula for this calculation too , thank you

21) Uwer's Furniture manufactures a small table and a large table. The small table sells for $1,100, has variable costs of $540 per table, and takes 10 direct labor hours to manufacture. The large table sells for $1,700, has variable costs of $980, and takes eight direct labor hours to manufacture. The company has a maximum of 5,000 direct labor hours per month when operating at full capacity. If there are no constraints on sales of either of the products and the company could choose any proportions of product mix that they wanted, the maximum contribution margin that the company could earn will be A) $1,062,500 B) $612,500 C) $1,675,000 D) $450,000

Answer 1

- Statement Page of selling Price - variable cost contribution per unit - Direct lobor hours per unit contribution per direct - labor hour Ronking Small Table $1100 ($ 540) $ 560 10 Large Table $ 1700 -($980) $720 $ 56 $ 9o Ranking ㅍ I Sinu the contribution per direct dobor hour of Large Table is higher than that of the small table, company should choose to produce only Large Tables utilizing 5000 direct lobor hours A By Number of Lorge tables that will be produced 625 (5000 + 8) ribution per unit $ 720 - Total contribution (AXB) $450000 contribution per Answer - D) $450000