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:

Increased Outputs

indicate a higher level of production or activities, often resulting from efficiency improvements or higher demand.

Constant Amount

A fixed value that does not change over time or under varying circumstances.

Socialism

Socialism is a political and economic theory advocating for collective or governmental ownership and administration of the means of production and distribution of goods.

Private Hands

Ownership or control by private individuals or corporations, as opposed to public or government ownership.