The Following Are Production and Cost Data for Two Products

question 48

Multiple Choice

The following are production and cost data for two products, buckets and pails, produced in batches of 600 each. $\begin{array}{lrr}&\text { Buckets }&\text { Pails }\\\text { Contribution margin per batch } & \$ 360 & \$ 250 \\\text { Machine set-ups needed per batch } & 14 & 9\end{array}$ The company can only perform 9,450 set-ups each period, yet there is unlimited demand for each product. What is the maximum contribution margin for the year?

• A) $366,000
• B) $243,000
• C) $1,050
• D) $262,500

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Definitions:

Income Subsidy

Financial assistance programs provided by governments or institutions to individuals or groups to help supplement their income, typically aimed at the needy or to promote certain economic activities.

After-Tax Income

The amount of net income left after all federal, state, and withholding taxes have been deducted from an individual's earnings.

Tax Liability

The total amount of taxes owed by an individual or a corporation to the tax authorities.

Negative Income Tax

A proposed system of social security that guarantees a minimum income to all, where those earning below a certain amount receive supplemental pay from the government instead of paying taxes.