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

question 38

Multiple Choice

A company sells two products with information as follows: $$\begin{array} { | l | r | r | } \hline & \mathrm { A } & \mathrm { B } \\\hline \text { Sales price per unit } & \$ 11 & \$ 26 \\\hline \text { Variable cost per unit } & \$ 10 & \$ 10 \\\hline\end{array}$$ 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 3,000 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?

• A) $156,000
• B) $60,000
• C) $96,000
• D) $3,000

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