The Following Are Production and Cost Data for Two Products

question 34

Multiple Choice

The following are production and cost data for two products, A and B, produced in batches of 100 units. $\begin{array}{lrr}&\text { Product A }&\text { Product B }\\\text { Contribution margin per batch } & \$ 450 & \$ 340 \\\text { Machine set-ups needed per batch } & 25 & 20\end{array}$ The company can only perform 12,000 set-ups each period yet there is unlimited demand for each product. What is the incremental profit from producing Product A instead of Product B for the year?

• A) $216,000
• B) $204,000
• C) $12,000
• D) $54,000

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