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8: Make Or Buy/Limiting Factor: A company makes a single product, the Jack which has a contribution of 12 per unit. They currently sell 2,000

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8: Make Or Buy/Limiting Factor: A company makes a single product, the "Jack" which has a contribution of 12 per unit. They currently sell 2,000 units per month. The Jack uses 5 production hours per unit and the company has 12,000 production hours available. The product manager has proposed that there is a market available for twin-sets of Jack and a complementary product "Jill" of 500 twinset units per month over and above existing demand for Jacks. Adding the Jill to create a twin-set is expected to add 20 to the current price of a Jack only. The Jill can be bought in externally for 22, but the manager says the company could also produce the Jill in house for 14 of variable cost using 5 production hours per Jill. Using the optimal solution, how much additional contribution can be earned per month by adding the twin-sets? a) 3,600 b) 4,000 c) 5,000 d) 9,000

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