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Raven Co. owns a machine that can produce two specialized products. Production time for Product X is two units per hour and for Product Z

Raven Co. owns a machine that can produce two specialized products. Production time for Product X is two units per hour and for Product Z is five units per hour. The machines capacity is 2,300 hours per year. Both products are sold to a single customer who has agreed to buy all of the companys output up to a maximum of 3,910 units of Product X and 2,055 units of Product Z. Selling prices and variable costs per unit to produce the products follow.

$ per unit Product X Product Z
Selling price per unit $ 12.00 $ 7.20
Variable costs per unit 3.60 4.32

Determine the company's most profitable sales mix and the contribution margin that results from that sales mix.

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