Question
Here is some information about 2 products: Product A Product B Selling Price per unit $90 $100 Variable Cost per unit $50 $55 Hours of
Here is some information about 2 products:
Product A Product B
Selling Price per unit $90 $100
Variable Cost per unit $50 $55
Hours of processing required on a certain machine 2 3
What is the contribution margin per unit of each product?
What is the contribution margin per hour of processing on this machine for each product?
If the amount of processing time on this machine is limited to 60 hours per week and the company produces only one of the 2 products, how many units of each product can this machine produce in one week and what is the total contribution margin that would be earned for each product?
Which product should it produce and why?
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