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Bonita Industries can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution margin of
Bonita Industries can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution margin of $78 and takes two machine hours to make and Fancy has a unit contribution margin of $87 and takes three machine hours to make. There are 2400 machine hours available to manufacture a product. What should Bonita do?
| Make Fancy which creates $30 more profit per unit than Plain does. |
| Make Plain which creates $10 more profit per machine hour than Fancy does. |
| The same total profits exist regardless of which product is made. |
| Make Plain because more units can be made and sold than Fancy. |
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