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Heather Company has more demand than it can meet for both of its products, Deluxe and Supreme. Deluxe has a unit contribution margin of $57.60
Heather Company has more demand than it can meet for both of its products, Deluxe and Supreme. Deluxe has a unit contribution margin of $57.60 and requires two machine hours to make, and Supreme has a unit contribution margin of $72 and requires three machine hours to make. There are 2,400 machine hours available for manufacturing products. What should Heather do? Make Deluxe, which generates $4.80 more contribution margin per machine hour than Supreme. O Make Deluxe, because more units can be made and sold than Supreme. The same contribution margin would be generated regardless of which product is made, so produce whichever product is operationally easiest. Make Supreme, which generates $14.40 more unit contribution margin than Deluxe
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