Allocation of scarce resources Sierra Sound Systems makes electronic products. Because the employees of one of the company's plants are on strike, the Chicago plant is operating at peak capacity. It makes two electronic products: wireless headphones and earbuds. Presently, the company can sell as many of each product as can be made, but making earbuds takes twice as long in production labor time as headphones. The company's production capacity is 80,000 labor hours per month. Data on each product are as follows: Sales Variable costs Headphones Earbuds $57.60 $86.40 (46.40) (70.40) $11.20 $16.00 1 2 Contribution margin Labor hours required Fixed costs are $192,000 per month. How many of each product should the Chicago plant make? units of headphones units of earbuds

Allocation of scarce resources Sierra Sound Systems makes electronic products. Because the employees of one of the company's plants are on strike, the Chicago plant is operating at peak capacity. It makes two electronic products: wireless headphones and earbuds. Presently, the company can sell as many of each product as can be made, but making earbuds takes twice as long in production labor time as headphones. The company's production capacity is 80,000 labor hours per month. Data on each product are as follows: Sales Variable costs Headphones Earbuds $57.60 $86.40 (46.40) (70.40) $11.20 $16.00 1 2 Contribution margin Labor hours required Fixed costs are $192,000 per month. How many of each product should the Chicago plant make? units of headphones units of earbuds

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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