6.Wood Carving Corporation manufactures three products. Because of a recent lack of skilled wood carvers, the corporation has had ashortage of available labor hours. The following per unit data relates to the three products of the corporation:LetterElvisCandleOpenersStatuesHoldersSales Price$30$80$42Variable Costs$20$40$20Labor Hours Required1Assume that Wood Carving only has 1,800 labor hours available next month. Assume also that Wood Carving can only sell 800units of each product in a given month. What is the maximum amount of contribution margin that Wood Carving can generate nextmonth given this labor hour shortage?А.$12,000В.$19,000С.$19,600D.$19,800E. None of the above

Name: 6.Wood Carving Corporation manufactures three products. Because of a
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Description: 6.Wood Carving Corporation manufactures three products. Because of a recent lack of skilled wood carvers, the corporation has had ashortage of available labor hours. The following per unit data relates to the three products of the corporation:Letter

We have the following information: Assume that Wood Carving has 1,800 labor hours available next month Assume that Wood Carving can only sell 800 units of each product in a given monthMaximum amount of contribution margin that Wood Carving can generate next month given this labor hour shortage The company will make maximum amount of candle holder as the candle holders have high contribution margin labor hour Contribution margin for 800 units of Candle Holders = 800 units × $22 = $17,600 Hours Required for Candle holders = 800 units × 2 = 1,600 hours Remaining hours = 1,800 hours - 1,600 hours The remaining 200 labor hrs will be used for letter openers. They can make 200 letter openers (Remaining hours ÷ Labor hours required i.e, 200 hours ÷ 1 = 200 units) Contribution margin for 200 units of letter openers = 200 units × $10 = $2,000 Total contribution margin = $17,600 + $2,000 = $19,600 Answer: (C) $19,600

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Wood Carving Corporation manufactures three products. Because of a recent lack of skilled wood carvers, the corporation has had a shortage of available labor hours. The following per unit data relates to the three products of the corporation: Letter Elvis Candle Openers Statues Holders Sales Price $30 $80 $42 Variable Costs $20 $40 $20 Labor Hours Required 1 6 2 Assume that Wood Carving only has 1,800 labor hours available next month. Assume also that Wood Carving can only sell 800 units of each product in a given month. What is the maximum amount of contribution margin that Wood Carving can generate next month given this labor hour shortage? А. $12,000 В. $19,000 C. $19,600 D. $19,800 E. None of the above

Wood Carving Corporation manufactures three products. Because of a recent lack of skilled wood carvers, the corporation has had a shortage of available labor hours. The following per unit data relates to the three products of the corporation: Letter Elvis Candle Openers Statues Holders Sales Price $30 $80 $42 Variable Costs $20 $40 $20 Labor Hours Required 1 6 2 Assume that Wood Carving only has 1,800 labor hours available next month. Assume also that Wood Carving can only sell 800 units of each product in a given month. What is the maximum amount of contribution margin that Wood Carving can generate next month given this labor hour shortage? А. $12,000 В. $19,000 C. $19,600 D. $19,800 E. None of the above

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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