Zantaq Inc The Market Demand Is Limited to 2,000 Units of Each

question 117

Multiple Choice

Zantaq Inc. has 5,400 machine hours available each month. The following information on the company's three products is available:
$$\begin{array} { l c r r } & & & \text { Side } \\& \text { Bookcases } & \text { Chairs } & \text { Tables }\\\text { Contribution margin per unit } &\$ 15.00 & \$ 18.00 & \$ 7.50 \\\text { Machine hours per unit } & 3&2&1\end{array}$$

The market demand is limited to 2,000 units of each of the three products.
- What is the maximum possible contribution margin that Zantaq could make in any month?

• A) $81,000.
• B) $46,500.
• C) $43,000.
• D) $51,000.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets.

Liquidity

The ability of an asset to be quickly converted into cash without significant loss in value.

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.

Income Statement

A financial document that provides a summary of a company's revenues, expenses, and profits over a specific period, detailing its ability to generate earnings.