Question

Roberto, Inc. manufactures products A and B. Both products have a contribution margin ratio of 40%. What is the contribution margin per unit of the constrained resource for product B, if labor time is the constrained resource

Answer 1

Answer:

3 minutes

Explanation:

The computation of the contribution margin per unit of the constrained resource for product B is shown below:

Contribution margin per unit is

= Contribution margin per unit ÷ lead time

= 6 minutes ÷ 2 minutes

= 3 minutes

We simply divided the contribution margin per unit from the lead time so that the contribution margin per unit for product B could come