a. 2400 units of N and 300 units of M b. 300 units of N and 2100 units of M c. 1200 units of N and 1050 units of M d. 2400 units of N and 0 units of M
FRANCORP sells two products.
Products
M N
Selling price per unit $80 $60
Less variable expenses per unit $46 $40
Contribution margin per unit $34 $20
Current demand per week (units) 2,100 2,400
Processing time required on machine XYZ per unit 2 min. 1 min.
- Machine XYZ is a constrained resource and is being used at 100% capacity.
- Machine XYZ has a capacity of 3,000 minutes per week.
Assuming FRANCORP wants to maximize its total contribution margin, how much of each product should it produce?
a. 2400 units of N and 300 units of M
b. 300 units of N and 2100 units of M
c. 1200 units of N and 1050 units of M
d. 2400 units of N and 0 units of M
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