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3. Two types of gears are produced: A and B. Gear A has a unit contribution margin of $200, and Gear B has a unit

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3. Two types of gears are produced: A and B. Gear A has a unit contribution margin of $200, and Gear B has a unit contribution margin of $400. Gear A uses 2 hours of grinding time, and Gear B uses 5 hours of grinding time. There are 200 hours of grinding time available per week. This is the only internal constraint. Required (20 marks): a. Determine the optimal mix. (5 marks) b. What is the total contribution margin? (5 marks) c. Suppose that there is an additional demand constraint: Market conditions will allow the sale of only 80 units of each gear. Now, what is the optimal mix? Total contribution margin per week? (10 marks) Page 1 of 3

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