A company makes two products A and B, using a single resource pool The resource is available for 900 minutes per day The contribution margin s for A and B are $ 20 and $ 35 per unit respectively The unit loads are 10 and 20 minutes per unit a Which product is more profitable b The company wishes to...

a A is more profitable The capacity of A and B respectively are 90010 90 and 9 ...

A company makes two products A and B, using a single resource pool. The resource is available

Question:

A company makes two products A and B, using a single resource pool. The resource is available for 900 minutes per day. The s for A and B are $ 20 and $ 35 per unit respectively. The unit loads are 10 and 20 minutes per unit.
a. Which product is more profitable?
b. The company wishes to produce a mix of 60% As and 40% Bs. What is the effective capacity (units per day)?
c. At the indicated product mix, what is the financial capacity (profit per day)?
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...