Whelchel Products Inc

question 1

Multiple Choice

Whelchel Products Inc.makes two products-K12C and R25O.Product K12C's selling price is $56.00 and its unit variable cost is $33.60.Product R25O's selling price is $195.00 and its unit variable cost is $156.00.The monthly demand is 980 units for product K12C and 500 units for R25O.The constrained resource is a particular machine that is available for 10, 100 minutes each month.Each unit of product K12C requires 7 minutes on this machine and each unit of product R25O requires 15 minutes on this machine. What is the maximum contribution margin the company can earn per month?

• A)$27, 820
• B)$30, 376
• C)$29, 155
• D)$41, 452

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Definitions:

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or completion.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of a company's accounts receivable that may not be collected.

Accounts Receivable

Money owed to a company by its customers for goods or services delivered or used but not yet paid for.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of receivables that may not be collectible.