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Schmidt Company Makes Three Sizes of Shirts: Small,Medium and Large

question 99

Essay

Schmidt Company makes three sizes of shirts: Small,Medium and Large.The company uses one assembly line that has a limit of 600 labor hours per week.Schmidt Company can sell all the shirts it can make under current operating capacity.The following information is available:
Required:
A)Determine the weekly contribution margin when all the labor hours are allotted to the shirts with the highest selling price per unit.
B)Determine the weekly contribution margin when all the labor hours are allotted to the shirts with the highest contribution margin per unit.
C)Determine the weekly contribution margin when all the labor hours are allotted to the shirts with the highest contribution margin per labor hour.

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Definitions:

Reabsorption

The process by which substances are taken back into the bloodstream from the fluids in the kidneys.

Malpighian Tubules

Excretory structures in insects and some other arthropods that remove wastes from the body and help in osmoregulation.

Hemolymph

Fluid that circulates in an open circulatory system.

Insects

A class of arthropods characterized by a three-part body (head, thorax, abdomen), three pairs of jointed legs, compound eyes, and one pair of antennae.