1. Neagle Company has 8,000 machine hours available to use to produce either Product A or Product B. The cost accounting department developed the following unit information for each of the products:

Product A Product B

Sales price $54 $65

Direct materials 19 21

Direct labor 15 14

Variable manufacturing overhead 8 12

Fixed manufacturing overhead 4 8

Machine hours required .6 1.0

Management desires to make a decision regarding which product to produce in order to maximize the company's income.

Instructions

Which product should be produced? Show calculations to support your answer.