Edison Company Produces Two Types of Piano Legs, Plain and Fancy

question 91

Multiple Choice

Edison Company produces two types of piano legs, plain and fancy, which have unit contribution margins of $8 and $12, respectively. Each piano leg must spend time on a special machine. The firm owns four machines that together provide 10,000 hours of machine time per year. The plain leg requires 0.25 hours of machine time, and the fancy leg requires 0.5 hours of machine time.
-Refer to the Figure.What is the total contribution margin of the optimal mix of plain and fancy legs?

• A)$240,000
• B)$280,000
• C)$320,000
• D)$480,000

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