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JSON-5952 Inc. produces Products X5, Y8, and Z9. The following table provides per unit information relating to the three products: Product X5 Y8 Z9 Selling
JSON-5952 Inc. produces Products X5, Y8, and Z9. The following table provides per unit information relating to the three products:
Product | |||
---|---|---|---|
X5 | Y8 | Z9 | |
Selling price | $ 72.00 | $ 60.00 | $ 62.00 |
Variable expenses: | |||
Direct materials | 21.60 | 18.00 | 9.00 |
Other variable expenses | 21.60 | 27.00 | 34.40 |
Total variable expenses | 43.20 | 45.00 | 43.40 |
Contribution margin | $ 28.80 | $ 15.00 | $ 18.60 |
Contribution margin ratio | 40% | 25% | 30% |
JSON-5952 has enough demand to sell 1,000 units of each product per month. Each product requires the same direct materials in its production. The direct materials cost $3 per pound. The company will at most have 6,600 pounds of the direct materials available every month.
What is the maximum contribution margin that JSON-5952 can earn per month using its 6,600 pounds of direct materials optimally?
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