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Logan Company produces two products, Standard and Premier. Logan can sell all of the Standard and Premier products it can produce, but it has limited
Logan Company produces two products, Standard and Premier. Logan can sell all of the Standard and Premier products it can produce, but it has limited production capacity. Machine hours per unit for Standard is 1 hour and for Premier is 1.5 hours. The company has 216,000 machine hours available. Contribution margin per unit is $24 for Standard and $30 for Premier. What is the total contribution margin if Logan chooses the most profitable sales mix?
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To determine the most profitable sales mix we need to calculate the contribution margin per machine hour for each product This will help us determine ...Get Instant Access to Expert-Tailored Solutions
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