The following information applies to the products of Thornton Company. Product Froduct Selling price per unit Variable cost per unit $17 $17 11 13 Identify the product that should be produced or sold under each of the following constraints. Consider each constraint separately Required a. One unit of Product A requires 2 hours of labor to produce, and one unit of Product B requires 4 hours of labor to produce. Due to labor constraints, demand is higher than the company's capacity to make both products. b. The products are sold to the public in retail stores. The company has limited floor space and cannot stock as many products as it would like. Display space is available for only one of the two products. Expected sales of Product A and Product B are 11,000 units and 10,000 units, respectively. c. The maximum number of machine hours available is 46,000. Product A uses 2 machine hours, and Product B uses 10 machine hours. The company can sell all the products it produces. Complete this question by entering your answers in the tabs below. Required A Required B Required C One unit of Product A requires 2 hours of labor to produce, and one unit of Product B requires 4 hours of labor to produce. Due to labor constraints, demand is higher than the company's capacity to make both products. (Round your answers to 2 decimal places.) Product A Product B Contribution margin per labor hour
The following information applies to the products of Thornton Company. Product Froduct Selling price per unit Variable cost per unit $17 $17 11 13 Identify the product that should be produced or sold under each of the following constraints. Consider each constraint separately Required a. One unit of Product A requires 2 hours of labor to produce, and one unit of Product B requires 4 hours of labor to produce. Due to labor constraints, demand is higher than the company's capacity to make both products. b. The products are sold to the public in retail stores. The company has limited floor space and cannot stock as many products as it would like. Display space is available for only one of the two products. Expected sales of Product A and Product B are 11,000 units and 10,000 units, respectively. c. The maximum number of machine hours available is 46,000. Product A uses 2 machine hours, and Product B uses 10 machine hours. The company can sell all the products it produces. Complete this question by entering your answers in the tabs below. Required A Required B Required C One unit of Product A requires 2 hours of labor to produce, and one unit of Product B requires 4 hours of labor to produce. Due to labor constraints, demand is higher than the company's capacity to make both products. (Round your answers to 2 decimal places.) Product A Product B Contribution margin per labor hour
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:The following information applies to the products of Thornton Company.
Product
Froduct
Selling price per unit
Variable cost per unit
$17
$17
11
13
Identify the product that should be produced or sold under each of the following constraints. Consider each constraint separately
Required
a. One unit of Product A requires 2 hours of labor to produce, and one unit of Product B requires 4 hours of labor to produce. Due to
labor constraints, demand is higher than the company's capacity to make both products.
b. The products are sold to the public in retail stores. The company has limited floor space and cannot stock as many products as it
would like. Display space is available for only one of the two products. Expected sales of Product A and Product B are 11,000 units
and 10,000 units, respectively.
c. The maximum number of machine hours available is 46,000. Product A uses 2 machine hours, and Product B uses 10 machine
hours. The company can sell all the products it produces.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Required C
One unit of Product A requires 2 hours of labor to produce, and one unit of Product B requires 4 hours of labor to produce.
Due to labor constraints, demand is higher than the company's capacity to make both products. (Round your answers to 2
decimal places.)
Product A
Product B
Contribution margin per labor hour
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