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A Company Sells Two Products with Information as Follows The Products Are Machine Made

question 42

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A company sells two products with information as follows: AB Sales price per unit $12$28 Variable cost per unit $10$12\begin{array} { | l | r | r | } \hline & \mathrm { A } & \mathrm { B } \\\hline \text { Sales price per unit } & \$ 12 & \$ 28 \\\hline \text { Variable cost per unit } & \$ 10 & \$ 12 \\\hline\end{array} The products are machine made.Four units of product A can be made with one machine hour,and two units of product B can be made with one machine hour.The company has a maximum of 6,000 machine hours available per month.Assume there are no constraints on sales of either product,and the company can choose any product mix they wish.What is the maximum amount of contribution margin that the company could earn in a month?

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Definitions:

Advertising Expenditures

The amount of money spent on promoting products or services through various media, aiming to increase awareness and sales.

GDP

Gross Domestic Product, the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Cartel

An agreement among competing firms to control prices or production, typically to reduce competition and increase profits illegally or unethically.

Cost-Plus Pricing

A pricing strategy where the selling price is determined by adding a specific markup to a product's cost.

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