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Bricktan Incorporated makes three products, Basic, Classic, and Deluxe. The maximum Bricktan can sell is 75,000 units of Basic, 420,000 units of Classic, and 120,000 units of Deluxe. Bricktan has limited production capacit

Bricktan Incorporated makes three products, Basic, Classic, and Deluxe. The maximum Bricktan can sell is 75,000 units of Basic, 420,000 units of Classic, and 120,000 units of Deluxe. Bricktan has limited production capacit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Bricktan Incorporated makes three products, Basic, Classic, and Deluxe. The maximum Bricktan can sell is 75,000 units of Basic, 420,000 units of Classic, and 120,000 units of Deluxe. Bricktan has limited production capacity of 900,000 machine hours. Machine hours per unit are as follows: Basic, 1 hour; Classic, 1.25 hours; and Deluxe 2.5 hours. Contribution margin per unit is $15 for Basic, $25 for Classic, and $55 for Deluxe. What is the total contribution margin if Bricktan chooses the most profitable sales mix? Select one: a. $9,700,000. b. $15,500,000. c. $12,800,000. d. $18,225,000. e. $8,000,000.
Transcribed Image Text:Bricktan Incorporated makes three products, Basic, Classic, and Deluxe. The maximum Bricktan can sell is 75,000 units of Basic, 420,000 units of Classic, and 120,000 units of Deluxe. Bricktan has limited production capacity of 900,000 machine hours. Machine hours per unit are as follows: Basic, 1 hour; Classic, 1.25 hours; and Deluxe 2.5 hours. Contribution margin per unit is $15 for Basic, $25 for Classic, and $55 for Deluxe. What is the total contribution margin if Bricktan chooses the most profitable sales mix? Select one: a. $9,700,000. b. $15,500,000. c. $12,800,000. d. $18,225,000. e. $8,000,000.
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