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Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32,respectively. The variable costs for each product are $20,

Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32,respectively. The variable costs for each product are $20, $50, and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales, 7 hours; and Wales 1 hour.

  1. Which product has the highest contribution margin per machine hour?
    1. Bales
    2. Tales
    3. Wales
    4. Bales and Tales have the same

  1. Assume that Widgeon produced enough product with the highest contribution margin per unit to use 1,000 hours ofmachine time. Product demand does not warrant any more production of that product. What is the maximumadditional contribution margin that can be realized by utilizing the remaining 1,000 hours on the product with thesecond highest contribution margin per hour?

a. $35,000

b. $1,400

c. $4,000

d. $28,000

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