Dills Corporation Has Provided the Following Data Concerning Its Two

question 16

Multiple Choice

Dills Corporation has provided the following data concerning its two products--O24 and C50: $\begin{array}{lrr}&\text { O24 }&\text {C50 }\\\text { Monthly unit demand ........ } & 1,500 & 7,300 \\\text { Selling price................ } & \$ 425.00 & \$ 130.00 \\\text { Unit variable cost ........... } & \$ 297.50 & \$ 78.00\end{array}$
The total amount of the constrained resource available each month is 49,250 grams.Each unit of product O24 requires 17 grams of the constrained resource and each unit of product C50 requires 5 grams.What is the maximum contribution margin the company can earn per month?

• A)$570,850
• B)$475,225
• C)$453,457
• D)$438,250

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Definitions:

Selling Expenses

Costs incurred directly from the selling of products or services, such as advertising and sales staff salaries.

Depreciation

The methodical distribution of a physical asset's cost throughout its expected lifespan.

Cost Of Goods Sold

Expenses directly linked to the creation of products sold by a business, such as materials and workforce costs.

Merchandising Firm

A business that purchases finished products and sells them to consumers without altering the state of the product.