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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?
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A.150 units of Product X.
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B.120 units of Product Y.
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C.100 units of Product X and 40 units of Product Y.
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D.100 units of Product X and 80 units of Product Y.
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