FAUSTINO Inc. manufactures two products, MICHAEL and GABRIEL. Contribution margin per unit is determined as follows: MICHAEL GABRIEL Revenue P 130 P 80 Variable costs (70). (38) Contribution margin 60 42 Total demand for MICHAEL is 8,000 units; and for GABRIEL, 16,000 units. Machine hours is a scarce resource. Only 42,000 machine hours are available during the year. MICHAEL requires 6 machine hours per unit while GABRIEL requires 3 machine hours per unit. How many units of MICHAEL should FAUSTINO In. produce?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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FAUSTINO Inc. manufactures two products, MICHAEL and GABRIEL.
Contribution margin per unit is determined as follows:
MICHAEL GABRIEL
Revenue
P 130
P 80
Variable costs
(70)
(38)
Contribution margin
60
42
Total demand for MICHAEL is 8,000 units; and for GABRIEL, 16,000 units.
Machine hours is a scarce resource. Only 42,000 machine hours are available
during the year. MICHAEL requires 6 machine hours per unit while GABRIEL
requires 3 machine hours per unit. How many units of MICHAEL should
FAUSTINO Inc. produce?
Transcribed Image Text:FAUSTINO Inc. manufactures two products, MICHAEL and GABRIEL. Contribution margin per unit is determined as follows: MICHAEL GABRIEL Revenue P 130 P 80 Variable costs (70) (38) Contribution margin 60 42 Total demand for MICHAEL is 8,000 units; and for GABRIEL, 16,000 units. Machine hours is a scarce resource. Only 42,000 machine hours are available during the year. MICHAEL requires 6 machine hours per unit while GABRIEL requires 3 machine hours per unit. How many units of MICHAEL should FAUSTINO Inc. produce?
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