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Assume that a company makes three products Product A, Product B, and Product C-and provides the following information with respect to those products: Selling price Variable costs per unit: Direct materials Direct labor Variable overhead. Total variable cost per unit Contribution margin per unit Multiple Choice $31.00 Product A Product B Product C $70 $75 $ 85 $20.80 16 40 2 58 $ 12 The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. It pays a direct labor wage rate of $16 per hour. The company has only 1,100 direct labor-hours available for production. Assuming the company has made optimal use of its 1,100 direct labor-hours, what is the maximum hourly rate the company should be willing to pay for additional labor-hours of capacity? 29 24 4 57 $ 18 20 32 3 55 $ 30

Assume that a company makes three products Product A, Product B, and Product C-and provides the following information with respect to those products: Selling price Variable costs per unit: Direct materials Direct labor Variable overhead. Total variable cost per unit Contribution margin per unit Multiple Choice $31.00 Product A Product B Product C $70 $75 $ 85 $20.80 16 40 2 58 $ 12 The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. It pays a direct labor wage rate of $16 per hour. The company has only 1,100 direct labor-hours available for production. Assuming the company has made optimal use of its 1,100 direct labor-hours, what is the maximum hourly rate the company should be willing to pay for additional labor-hours of capacity? 29 24 4 57 $ 18 20 32 3 55 $ 30

FINANCIAL ACCOUNTING
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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Assume that a company makes three products-Product A, Product B, and Product C-and provides the following information with respect to those products: Selling price Variable costs per unit: Direct materials Direct labor Variable overhead Total variable cost per unit Contribution margin per unit Multiple Choice $31.00 Product A Product B Product C $ 70 $ 75 $ 85 $20.80 16 40 2 58 $ 12 The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. It pays a direct labor wage rate of $16 per hour. The company has only 1,100 direct labor-hours available for production. Assuming the company has made optimal use of its 1,100 direct labor-hours. what is the maximum hourly rate the company should be willing to pay for additional labor-hours of capacity? 29 24 4 57 $18. 20 32 3 55 $ 30
Transcribed Image Text:Assume that a company makes three products-Product A, Product B, and Product C-and provides the following information with respect to those products: Selling price Variable costs per unit: Direct materials Direct labor Variable overhead Total variable cost per unit Contribution margin per unit Multiple Choice $31.00 Product A Product B Product C $ 70 $ 75 $ 85 $20.80 16 40 2 58 $ 12 The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. It pays a direct labor wage rate of $16 per hour. The company has only 1,100 direct labor-hours available for production. Assuming the company has made optimal use of its 1,100 direct labor-hours. what is the maximum hourly rate the company should be willing to pay for additional labor-hours of capacity? 29 24 4 57 $18. 20 32 3 55 $ 30
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