Magnitude Company Produces a and B with Contribution Margins Per

question 111

Multiple Choice

Magnitude Company produces A and B with contribution margins per unit of $40 and $30, respectively. Only 500 labor hours and 300 machine hours are available for production. Time requirements to produce one unit of A and B are as follows: $\begin{array}{lcc} & \text { Product A } & \text { Product B } \\\text { Labor hours per unit } & 5 & 2 \\\text { Machine hours per unit } & 1 & 4\end{array}$ What is the constraint on machine hours for Magnitude Company?

• A)1A + 4B ? 300
• B)5A + 2B ? 500
• C)1A + 4B ? 500
• D)40A + 30B ? 500

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