Wyandott Co

question 85

Multiple Choice

Wyandott Co.produces two products.Both products pass through a firing process that is operating at full capacity and is a production bottleneck.Product A requires 2 hours of processing and has a contribution margin per unit of $60.Product B requires 1 hour of processing and has a contribution margin of $40.Which of the following provides the most accurate assessment of the situation assuming unlimited demand for each product?

• A) Production of Product B rather than Product A will generate the maximum profitability for Wyandotte.
• B) Production of Product A rather than Product B will generate the maximum profitability for Wyandotte.
• C) Raising the selling price of Product B by $20 will cause management to be indifferent between producing Product A or Product B.
• D) Raising the selling price of Product A by $10 will cause management to be indifferent between producing Product A or Product B.