The Following Are Production and Cost Data for Two Products

question 43

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

---

Definitions:

Virginia

A state located in the Southeastern and Mid-Atlantic regions of the United States, known for its historical significance and diverse geography.

Seller's Market

A market condition characterized by a shortage of goods available for sale, leading to higher prices and favoring sellers over buyers.

Buyer's Market

A market condition where the supply of goods exceeds demand, giving buyers an advantage in terms of selection and negotiation of prices.