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A company sells two products with information as follows: ​ A B Sales price per unit $12 $22 Variable cost per unit $10 $10The products are machine made. Four units of product A can be made with one machine hour, and two units of product B can be made with one machine hour. The company has a maximum of 4000 machine hours available per month. Assume there are no constraints on sales of either product, and the company can choose any product mix they wish. What is the maximum amount of contribution margin that the company could earn in a month? $96,000 $8000 $80,000 $176,000

Respuesta :

Answer:

Option (c) : $80,000

Explanation:

As per the data given in the question,

                                         A        B

Sales price                      $12     $22

Less: Variable cost         $10     $10

Contribution per unit      $2      $10

Time required in hours  0.25    0.50

Contribution per hour     $8      $20

Rank                                 2          1

Company should produce only product B to maximize the contribution.

Total contribution = $20 × 4,000

= $80,000

anthougo

The maximum amount of contribution margin that the company could earn monthly is A. $96,000.

Data and Calculations:

                                                      A        B

Sales price per unit                    $12    $22

Variable cost per unit                $10     $10

Contribution per unit                  $2     $12

Machine hour                             0.25   0.50

Contribution per machine hour $8     $24

Available machine hours = 4,000 hours

Thus, the maximum amount of contribution margin that the company could earn monthly is A. $96,000 ($24 x 4,000).

Learn more about contribution per resource constraint her: https://brainly.com/question/22530597

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