Underwood,Inc

question 36

Multiple Choice

Underwood,Inc.manufactures two products.It currently has 2,000 hours of direct labor and 1,000 hours of machine time available per month.The table below lists the contribution margin,labor and machine time requirements,and demand for each product. What is the total contribution margin if Underwood,Inc.prioritizes production according to its limited resources?

• A)$39,000
• B)$15,000
• C)$24,000
• D)$19,500

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Definitions:

Product Cost

The total expense involved in creating a product, including direct materials, direct labor, and manufacturing overhead.

Variable Cost

Expenses that vary directly with the amount of output or the scale of operations.

Product Costs

The costs directly associated with the production of goods or services, including raw materials, labor, and manufacturing overhead.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, the government, and other interested parties.