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Production Constraint Decisions Kaiser Company produces two products and selected data is shown below: Selling price per unit Less: variable expenses per unit Contribution margin
Production Constraint Decisions Kaiser Company produces two products and selected data is shown below: Selling price per unit Less: variable expenses per unit Contribution margin per unit Current demand per week (units) Contribution margin ratio Processing time required on machine A1 per unit Products 1 2 $ 60 $ 50 36 35 $ 24 $ 15 2,000 2,200 40% 30% 1.00 min. 0.50 min. Machine Al is the scarce resource because there is excess capacity on other machines. Machine Al is being used at 100% of its capacity. Machine Al capacity is 2,400 minutes per week. 1.Should Kaiser focus its efforts on Product 1 or 2? 2. What is the best combination of the two products that can maximize contribution margin for the company? With this combination, what is the total contribution margin for Kaiser
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