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A manufacturer has a limited supply of 1,200 lbs of raw materials that can be used to produce either Product X or Y, details of

A manufacturer has a limited supply of 1,200 lbs of raw materials that can be used to produce either Product X or Y, details of which are given below.

Product X

Product Y

Selling price per unit

$200

$250

Variable costs per unit

$176

$200

Raw materials used per unit

8 lbs

10 lbs

Which one of the following should the manufacturer produce in order to maximize contribution margin?

  • A.150 units of Product X.

  • B.120 units of Product Y.

  • C.100 units of Product X and 40 units of Product Y.

  • D.100 units of Product X and 80 units of Product Y.

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