|
8. |
a. The product to emphasize can be determined by
computing the contribution margin per unit of the scarce resource, which in
this case is tapping machine time.
Product E should be
emphasized because it has the greatest contribution margin per unit of the
scarce resource. b. If additional
tapping machine time would be used to produce more of Product E, the time
would be worth 60 × $20 = $1,200 per hour. |