Consider the Following Production and Cost Data for Two Products

question 21

Multiple Choice

Consider the following production and cost data for two products, L and C: $\begin{array}{l}&\text { ProductL} &\text {Product C}\\\text { Contribution margin per unit} &£120&£112\\\text { Machine minutes needed per unit }&10 \text { minutes } &8 \text { minutes }\\\end{array}$
A total of 60,000 machine minutes are available each period and there is unlimited demand for each product. What is the largest possible total contribution margin that can be realized each period

• A)£720,000
• B)£840,000
• C)£780,000
• D)£1,560,000

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Definitions:

Cash Flow Statement

A financial report that provides a summary of the cash inflows and outflows for a business over a specific period.

Marketable Securities

Financial instruments and assets that can be easily translated into cash because they have high liquidity and short maturities.

Accounts Receivable

Money owed to a company by its customers for products or services provided on credit.

Inventory

The total amount of goods or materials a company holds, meant for sale or production.