Assume a company makes only three products, A, B, and C:Product A Product B Product C700Estimated customer demand in unitsSelling price per unitVariable cost per unitMachine-hours per unit600$ 65$ 26800$ 80$ 352.5$ 45$ 201.253.0The company has only 3,250 machine-hours available. What is the highest total contribution margin that the company can earn if it makes optimal use ofits constrained resource?Multiple Choice$63,000$65.000$58.000

Name: Product A Product B Product C 700 $ 80 $ 35 mand in units 600 800 $ 65 $ 26 $ 45 $ 20 1.25 2.5 3.0 achine-hours available. What is the highest total contribution margin that the…
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Contribution margin for a constrained resource is calculated by dividing the contribution margin per…

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Product A Product B Product C 700 $ 80 $ 35 mand in units 600 800 $ 65 $ 26 $ 45 $ 20 1.25 2.5 3.0 achine-hours available. What is the highest total contribution margin that the company can earn if it ma

Product A Product B Product C 700 $ 80 $ 35 mand in units 600 800 $ 65 $ 26 $ 45 $ 20 1.25 2.5 3.0 achine-hours available. What is the highest total contribution margin that the company can earn if it ma

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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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

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Assume a company makes only three products, A, B, and C:
Product A Product B Product C
700
Estimated customer demand in units
Selling price per unit
Variable cost per unit
Machine-hours per unit
600
$ 65
$ 26
800
$ 80
$ 35
2.5
$ 45
$ 20
1.25
3.0
The company has only 3,250 machine-hours available. What is the highest total contribution margin that the company can earn if it makes optimal use of
its constrained resource?
Multiple Choice
$63,000
$65.000
$58.000

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