Question
Spring, Inc. manufactures two products. It currently has 1,150 hours of direct labor and 1,500 hours of machine time available per month. The table below
Spring, Inc. manufactures two products. It currently has 1,150 hours of direct labor and 1,500 hours of machine time available per month. The table below lists the contribution margin, labor and machine time requirements, and demand for each product.
| Product A | Product B | |||||
| Unit contribution margin | $ | 15.00 | $ | 13.00 | ||
| Demand | 600 | units | 1,200 | units | ||
| Labor time | 3/4 | hour | 1 | hour | ||
| Machine time | 1 | hour | 3/4 | hour | ||
What is the total contribution margin if Spring, Inc. prioritizes production according to its limited resources?
Multiple Choice
-
$15,600
-
$9,000
-
$18,100
-
$24,600
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Frank Woods Business Accounting Volume 1
Authors: Alan Sangster Lewis Gordon Frank Wood
14th Edition
1292208627, 9781292208626
