Farris Company Reported the Following Information for Its Two Products

Farris Company reported the following information for its two products: Due to labor constraints, demand for each of the products is greater than its supply. Product X requires 1 hour of labor to produce and product Y requires 3 hours of labor to produce. Which of the following statements is true?
$\begin{array}{|l|r|r|}\hline &{\text { Product X }} &{\text { Product Y }} \\\hline \text { Selling price per unit } & \$ 35 & \$ 25 \\\hline \text { Variable cost per unit } & 20 & 15 \\\hline\end{array}$

A) Product X should be produced and sold because it has a lower cost than Product Y.
B) Product X should be produced and sold because it provides a higher contribution margin per labor hour than Product X.
C) Product Y should be produced and sold because it provided a higher contribution margin per unit than Product X.
D) Product Y should be produced and sold because it provides more revenue than Product X.

Correct Answer:

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