Consider the Following Production and Cost Data for Two Products

question 35

Multiple Choice

Consider the following production and cost data for two products, Q and P: $\begin{array}{lrr}&\text { Product O}&\text {product P}\\ \text { Contribution margin per unit } &£40&£36\\ \text { Machine minutes needed per unit} &8 \text { minutes } &6 \text { minutes } \\ \text { } &\\ \text { } &\\ \text { } &\\\end{array}$

A total of 24,000 machine minutes are available each period and there is virtually unlimited demand for each product. What is the largest possible total contribution margin that can be realised each period

• A)£120,000
• B)£144,000
• C)£456,000
• D)£132,000

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Definitions:

Cystic Duct

The short duct that connects the gallbladder to the common bile duct, allowing bile to flow from the gallbladder into the small intestine.

Soft Palate

The soft palate is the flexible, muscular part at the back of the roof of the mouth, separating the nasopharynx from the oropharynx.

Vermiform Appendix

A narrow, tube-shaped structure attached to the large intestine, considered to be a vestigial organ with an uncertain function in humans.

Uvula

A small fleshly extension at the back of the soft palate that hangs above the throat, which plays a role in speech and the regulation of airflow in the oral pharynx.