When a company has limited resources, management must decide which products to make and sell in order to maximize net income.

Bilodeau Company manufactures deluxe and standard pens. The limiting resource is machine capacity, which is 3,600 hours per month. Relevant data is shown below:

Deluxe pen standard pen

Contribution margin per unit$80 $60

Machine hours required per unit 4 2

Market demand (in units) 200 1500

Determine the product mix which maximizes the net income.

Answer rating: 100% (QA)

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