Custom Furniture Manufactures a Small Table and a Large Table

question 71

Multiple Choice

Custom Furniture manufactures a small table and a large table. The small table sells for $900, has variable costs of $560 per table, and takes ten direct labor hours to manufacture. The large table sells for $1,500, has variable costs of $980, and takes eight direct labor hours to manufacture. The company has a maximum of 5,000 direct labor hours per month when operating at full capacity. If there are no constraints on sales of either of the products, and the company could choose any proportions of product mix that they wanted, the maximum contribution margin that the company could earn will be:

• A)$250,000
• B)$425,000
• C)$330,000
• D)$325,000

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