Consider the Following Production and Cost Data for Two Products,L

question 132

Multiple Choice

Consider the following production and cost data for two products,L and C:

$\begin{array}{l r r} & \underline { \text { Product L } } & \underline { \text { Product C } } \\\text { Contribution Margin per Unit }& \$ 130 & \$ 120 \\\text { Machine Setups Needed per Unit } &10\text { setups }&8 \text { setups }\end{array}$

The company can only perform 65,000 machine setups each period due to limited skilled labour,and there is unlimited demand for each product.What is the largest possible total contribution margin that can be realized each period?

• A) $845,000.
• B) $910,000.
• C) $975,000.
• D) $1,820,000.

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Definitions:

Trichromat

An individual who has full color vision, resulting from the normal functioning of all three types of cone cells in the retina, enabling the perception of all colors.

Color Spectrum

The range of all possible frequencies of electromagnetic radiation, visible to the human eye as different colors.

See Colors

The perceptual experience of different wavelengths of light, interpreted by the visual system as colors.

Lens Adjusts

The process by which the lens of the eye changes its shape to focus light on the retina for clear vision at various distances.