A firm makes two products, A and B. The production process uses

the same materials and labor for each product, and labor rates are

the same for the two products. Skilled direct labor is in very short

supply, with only 12,000 hours available, paid at the rate of $6 per

hour. Contribution margin data follow:

A B

Unit sales price $39.00 93.00

Unit variable costs:

Direct Material 21.00 15.00

Direct Labor 3.00 18.00

Variable Overhead 3.75 22.50

Variable S & Admin 2.25 1.50

Total unit variable costs $30.00 $57.00

If the demand for these two products is unlimitedwe could sell all of

either A or B that we can produceshould we make and sell all A or all B?

Answer: ____________