The Wester Corporation produces three products with the following costs and selling prices: ProductABCSelling price per unit$ 21$ 12$ 32Variable cost per unit$ 11$ 7$ 18Fixed cost per unit$ 5$ 3$ 9Direct labor hours per unit0.40.10.7Machine hours per unit0.20.50.2The company has insufficient capacity to fulfill all of the demand for these three products.If machine hours are the constraint, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:

When there is constraint resource then contribution margin per constraint is the deciding factor.…

Answered: The Wester Corporation produces three…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter20: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4CMA: Eagle Brand Inc. produces two products as follows: Eagle Brand has 1,000 lbs. of raw materials that...

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The Wester Corporation produces three products with the following costs and selling prices:

	Product
A	B	C
Selling price per unit	$ 21	$ 12	$ 32
Variable cost per unit	$ 11	$ 7	$ 18
Fixed cost per unit	$ 5	$ 3	$ 9
Direct labor hours per unit	0.4	0.1	0.7
Machine hours per unit	0.2	0.5	0.2

The company has insufficient capacity to fulfill all of the demand for these three products.

If machine hours are the constraint, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:

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