Owen's Furniture manufactures a small table and a large table. The small table sells for $900, has variable costs of $550 per table, and takes 10 direct labor hours to manufacture. The large table sells for $1,600, has variable costs of $970, and takes eight direct labor hours to manufacture. The company has a maximum of 5,000 direct labor hours per month when operating at full capacity. If there are no constraints on sales of either of the products and the company could choose any proportions of product mix that they wanted, the maximum contribution margin that the company could earn will be ________.
A) $1,000,000
B) $606,250
C) $1,606,250
D) $393,750
D .D)
Small Table Large Table
Sales price $900 $1,600
Variable costs (550 ) (970 )
Contribution margin $350 $630
Labor hours per unit 10 8
Contribution margin per labor hour $35 $79
Ranking 2 1
Hours available No. of units
Total 5,000
Large 5,000 625
Small 0 0
Sales of large tables (1,600 x 625 ) $1,000,000
Less: Variable costs (970 x 625 ) 606,250
Contribution margin $393,750
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Fill in the blank(s) with correct word
A stock dividend will cause an increase in total contributed capital at the date the dividend is declared
Indicate whether the statement is true or false
The Equal Pay Act does not prohibit differences for ________
a) merit b) seniority c) quantity of work d) a&c e) all
In most organizations, ____ is power and the fuel used to make key decisions.
A. seniority B. trust C. money D. information