A company sells two products with information as follows: A B Sales price per unit $11.00 $20.00 Variable cost per unit $10.00 $12.00 The 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 3,000 machine hours available per month. The company can sell up to 17,000 units of product A per month and up to 3,000 units of product B for the month. What is the maximum amount of contribution margin that the company could earn in a month given the stated constraints? A. $17,000 B. $6,000 C. $30,000 D. $24,000
A company sells two products with information as follows: A B Sales price per unit $11.00 $20.00 Variable cost per unit $10.00 $12.00 The 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 3,000 machine hours available per month. The company can sell up to 17,000 units of product A per month and up to 3,000 units of product B for the month. What is the maximum amount of contribution margin that the company could earn in a month given the stated constraints? A. $17,000 B. $6,000 C. $30,000 D. $24,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A company sells two products with information as follows:
|
|
A
|
B
|
|
Sales price per unit
|
$11.00
|
$20.00
|
|
Variable cost per unit
|
$10.00
|
$12.00
|
The 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 3,000 machine hours available per month. The company can sell up to 17,000 units of product A per month and up to 3,000 units of product B for the month. What is the maximum amount of contribution margin that the company could earn in a month given the stated constraints?
$17,000
$6,000
$30,000
$24,000
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