Question
Please see the below question that I need help with; I am not sure how to do question one or two of the problem. Please
Please see the below question that I need help with; I am not sure how to do question one or two of the problem. Please do not copy the information from chegg as the last tutor did.
Airline Travels, Inc. manufactures two products that require both machine processing and labor operations. Although there is unlimited demand for both products, the company could devote all its capacities to a single product. Unit prices, cost data, and processing requirements follow.
Product A Product B
Unit selling price $75 $200
Unit variable costs $25 $80
Machine hours per unit 0.4 1.2
Labor hours per unit 2.0 6.0
Next year, the company will be limited to 160,000 machine hours and 120,000 labor hours. Fixed costs for the year are $1,000,000.
- 1. Prepare an income statement using the contribution margin format for the product volume computed in
- 2. Compute the most profitable combination of products to be produced next year. Explain your answer.
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