Brave Company manufactures and sells two products. Relevant per unit data concerning each product are given below:

StandardDeluxe

Selling price5075

Variable cost3030

Machine hours1.63.75

Market limit600100

Instructions: Show analysis and recommendation in good form

1.Compute the contribution margin per unit of the limited resource for each product.

2.If 1,200 additional machine hours are available, which product should be manufactured? How much contribution margin will the company earn from this product? (Disregard market limit)

3.Considering the market limit, how many units of each product should be produced? How much contribution margin will the company earn from this combination?

4.What will you recommend?