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Kingston Manufacturing has 27,000 labor hours available for producing X and Y. Consider the following information: Product X Product Y Required labor time per unit

Kingston Manufacturing has 27,000 labor hours available for producing X and Y. Consider the following information:

Product X Product Y
Required labor time per unit (hours) 2 3
Maximum demand (units) 6,000 8,000
Contribution margin per unit $ 5 $ 6
Contribution margin per labor hour $ 2.50 $ 2

If Kingston follows proper managerial accounting practices, how many units of Product X should it produce?

  • 8,000.

  • 1,500.

  • 5,000.

  • 4,500.

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