Question
n Lebeau Company, data for the contribution margin per unit and machine hours per unit for two products are as follows: Product A, $10 and
n Lebeau Company, data for the contribution margin per unit and machine hours per unit for two products are as follows: Product A, $10 and two hours; Product B, $12 and three hours. a) Calculate the contribution margin per unit of the limited resource for each product: Product A: $ Answer per hour Product B: $ Answer per hour b) If Lebeau Company has a limited number of machine hours and can sell all the units produced of either product, which product should it produce, Product A or Product B? AnswerProduct AProduct BEitherNeither Lebeau Company has a maximum of 12,000 machine hours available for production of Products A and B. c) How many units of product A can the company produce in the 12,000 machine hours? Answer units d) How many units of product B can the company produce in the 12,000 machine hours? Answer units Lebeau must produce a minimum of 1,500 units of Product B but may use any remaining machine hours to produce and sell either Product A or Product B or any combination of the two products. e) What is the total contribution margin that Lebeau will generate making and selling the 1,500 units of Product B? $ Answer f) Given that they must make at least 1,500 units of Product B, what is the maximum contribution margin that Lebeau can generate with 12,000 machine hours? $ Answer
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