Managerial Accounting: E6-11 Spencer company manufactures and sells three products

Managerial Accounting
E6-11
Spencer company manufactures and sells three products. relevant per unit data concerning each product are given below.
PRODUCT
A B C
Selling Price 9.00 12.00 14.00
Variable costs and expenses 3.00 9.50 12.00
Machine hours to produce 2.00 1.00 2.00

a) Compute the contribution margin per unit of the limited resource (machine hour) for each product.
b) Assuming 1500 additional machine hours are available, which product should be manufactured.
c) Prepare an analysis showing the total contribution margin if the additional hours are (1)divided equally among the products, and (2)allocated entirely to the product identified in (b) above
(1) Divided equally among the products
(2)allocated entirely to the product identified in (b) above
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