For the Upcoming Year,there Is a Maximum of 4050 Direct

question 23

Multiple Choice

For the upcoming year,there is a maximum of 4050 direct labour hours available.Management believes that the demand for both the standard and deluxe detailing is limited to 900 each per year.If the company maximises profits,what is the maximum contribution margin the company could have in the upcoming year?

• A) $ 67 500
• B) $175 500
• C) $162 000
• D) $ 60 750

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Definitions:

Direct Labor

The compensation, such as salaries or wages, given to workers who are directly engaged in producing goods or services.

Manufacturing Costs

Expenses directly related to the production of goods, including raw materials, labor, and overhead.

Prime Costs

The sum of direct materials cost and direct labor cost, representing the primary costs involved in producing a product.

Finished Goods Inventory

The stock of completed products ready for sale but not yet sold, representing a current asset on the balance sheet.