Effie Corporation Produces Two Products,P and Q

question 9

Multiple Choice

Effie Corporation produces two products,P and Q.P sells for $8.00 per unit; Q sells for $6.00 per unit.Variable costs for P and Q are $2.00 and $5.00,respectively.There are 7300 direct labor hours per month available for producing the two products.Product P requires 2.00 direct labor hours per unit,and product Q requires 4.00 direct labor hours per unit.The company can sell as many of either product as it can produce.What is the maximum monthly contribution margin that Effie can generate under the circumstances? (Round your answer to nearest whole dollar.)

• A)$21,900
• B)$3650
• C)$43,800
• D)$7300

---

Definitions:

Sarbanes-Oxley Act

Legislation that places an affirmative duty on the directors of publicly-traded corporations to monitor whether they are conforming to all legal requirements.

Duty of Care

A legal obligation to adhere to a standard of reasonable care while performing acts that could foreseeably harm others.

Negligent Credentialing

A legal theory that holds employers or institutions liable for failing to verify the qualifications or competencies of a professional they hire.

Ostensible Authority

The appearance or implication of authority given to an agent by the actions or statements of the principal, leading third parties to believe the agent has such authority.