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

question 51

Multiple Choice

A company sells two products with information as follows: $$\begin{array} { | l | r | r | } \hline & { \text { A } } & { \text { B } } \\\hline \text { Sales price per unit } & \$ 12 & \$ 26 \\\hline \text { Variable cost per unit } & \$ 10 & \$ 10 \\\hline\end{array}$$ 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 3000 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) $6000

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Definitions:

Bonus Pool

A fund allocated for bonuses, typically based on company performance, and distributed to employees based on predetermined criteria.

Fixed Percentage

A specified, constant proportion or rate that does not change with variation in base quantities, often used in financial contexts like interests or commissions.

Deferred Profit-Sharing Plans

A type of profit-sharing plan where contributions are deferred and placed in a trust for the employee until a set time, often retirement.

Quasi Pension Plans

Programs that mimic traditional pension plans but typically offer more flexibility and are often funded by the employees, sometimes with employer contributions.