Federal Furniture manufactures a small table and a large table
The small table sells for $1,000, has variable costs of $560 per table, and takes 10 direct labor hours to manufacture. The large table sells for $1,700, has variable costs of $970, and takes eight direct labor hours to manufacture. Calculate the contribution margin per direct labor hour for the large table. (Round your answer to the nearest cent.)
A) $91.25 per direct labor hour
B) $55.00 per direct labor hour
C) $44.00 per direct labor hour
D) $73.00 per direct labor hour
A .A)
Sales price $1,700
Less: Variable cost 970
Contribution margin $730
Labor hour required for 1 table 8
Contribution margin per direct labor hour $91.25
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