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Mena Corporation produces two products, Amber and Bobby. The information about the two products are presented in the following table. Amber Bobby Unit price (Baht)
Mena Corporation produces two products, Amber and Bobby. The information about the two products are presented in the following table. Amber Bobby Unit price (Baht) 480 360 Variable costs per unit (Baht) 312 252 Contribution margin per unit (Baht) 168 108 Weekly demand (Units) 1,600 1,900 Contribution margin ratio 35% 30% Processing time required on the lathe machine 1.5 minutes 0.5 minutes The lathe machine is the scarce resource. At present, it is used at 100% of its capacity The maximum capacity of the lathe machine is 2,600 minutes per week Required 4.1 How many units of Amber and Bobby should the company produce and sell to maximize contribution margin in short-run? Show your detail analysis. (15 points) 4.2 How much is the maximum contribution margin the company could earn under this constraint? Show your calculation. (5 points)
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