Consider the following production and cost data for two products, X and Y: The c

Question

Consider the following production and cost data for two products, X and Y:



The company has 15,000 machine hours 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?

Consider the following production and cost data for two products, X and Y: The company has 15,000 machine hours 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?

Explanation / Answer

margin per hour of X = $8 Margin per hour of Y = $9 So, Y produces a better margin. Maximum margin = 15000*9 = $1350000

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