Best Company produces three products-A, B, & C-with the following characteristics:ABSelling price per unit$30100%$17100%$13100%Variable cost per unit1757%847%46%Contribution margin per unit$1343%$953%$754%Machine hours per unit3.53.51.5The company has only 2,900 machine-hours available each month. Suppose currentmonthly demand for the products in question #11 is as follows:A: 400 units; B: 600 units; and C: 500 units. If Best Company wishes to maximize itscontribution margin, how many of each product will it produce?500 units of C; 400 units of A; and 214 units of B500 units of A; 400 units of B; and 200 units of C600 units of B; 400 units of A; and 500 units of CO 218 units of C; 350 units of B; and 300 units of A

Calculation of Contribution margin per machine hour and rank given A B C Contribution margin…

Answered: 00 units; and C: 500 units. If Best…

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00 units; and C: 500 units. If Best Company wishes in, how many of each product will it produce?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Best Company produces three products-A, B, & C-with the following characteristics:
A
B
Selling price per unit
$30
100%
$17
100%
$13
100%
Variable cost per unit
17
57%
8
47%
46%
Contribution margin per unit
$13
43%
$9
53%
$7
54%
Machine hours per unit
3.5
3.5
1.5
The company has only 2,900 machine-hours available each month. Suppose current
monthly demand for the products in question #11 is as follows:
A: 400 units; B: 600 units; and C: 500 units. If Best Company wishes to maximize its
contribution margin, how many of each product will it produce?
500 units of C; 400 units of A; and 214 units of B
500 units of A; 400 units of B; and 200 units of C
600 units of B; 400 units of A; and 500 units of C
O 218 units of C; 350 units of B; and 300 units of A

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