Craves Company produces two types of products, Product A and Product B. Revenue and cost information per unit for each product is as follows:

Product A Product B

Direct materials per unit..	$3.0	$3.0
Direct labor per unit......................................................................................	$3.5	$3.0
Variable manufacturing overhead per unit .	$1.5	$1.0
Fixed manufacturing overhead per unit......................................................................................	$1.0	$1.5
Milling machine minutes per unit......................................................................................	0.05	0.20
Selling price per unit......................................................................................	$10	$12
Yearly demand of products in units......................................................................................	400,000	400,000

The milling machines are potentially the constraint in the production facility. A total of 25,000 minutes are available on these machines.

a. What is the contribution margin per unit of the constrained resource for each product type?

Ans: $ _____________________ for Product A

$ _____________________ for Product B

b. To maximize net operating income, the company should produce:

Ans: _________________ units of Product A requiring ______________ minutes

__________________units of Product B requiring _______________ minutes