A company produces two products. Product A sells for $25, has variable costs of $15, and requires 2 machine hours to produce. Product B sells for $35, has variable costs of $20, and requires 5 machine hours to produce. 40,000 machine hours are available. The company can sell all it can make of either product. Which statement is true?

Multiple choice question.

Product A should be produced because it has a lower cost than Product B.

Product A should be produced because it will provide greater contribution margin per machine hour.

Production should be split between Product A and Product B.

Product B should be produced because it will provide greater contribution margin per machine hour.