Question
1. AntiFrostBite Fingers manufactures gloves and mittens in the same factory. Both products are made on the same machine. The company has 600 hours of
1. AntiFrostBite Fingers manufactures gloves and mittens in the same factory. Both products are made on the same machine. The company has 600 hours of extra time on this machine. A pair of gloves takes 12 minutes of machine time and a pair of mittens takes 9 minutes of machine time. A pair of mittens sells for $75 and a pair of gloves sells for $90. The contribution margin ratio for gloves is 48% and the contribution margin ratio for mittens is 52% There is enough demand to make as many gloves or mittens as possible.
A. What is the additional net operating income if the company uses the 600 hours of extra machine time to make mittens?
B. What is the additional net operating income if the company uses the 600 hours of extra machine time to make gloves?
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