Question
JSON-9722 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-9722 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 | $ 88.00 | $ 58.00 | $ 80.00 |
Variable expenses: | |||
Direct materials | 26.40 | 12.00 | 12.00 |
Other variable expenses | 26.40 | 34.40 | 44.00 |
Total variable expenses | 52.80 | 46.40 | 56.00 |
Contribution margin | $ 35.20 | $ 11.60 | $ 24.00 |
Contribution margin ratio | 40% | 20% | 30% |
JSON-9722 has enough demand to sell 800 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 5,400 pounds of the direct materials available every month.
What is the maximum contribution margin that JSON-9722 can earn per month using its 5,400 pounds of direct materials optimally?
multiple choice
-
$ 8,800
-
$ 28,000
-
$ 30,500
-
$ 19,200
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started