23.1k views
4 votes
A company can sell any mix of Product A and Product B at full capacity. The company has 100,000 hours of capacity. The demand for each product exceeds capacity. It takes one hour to make one unit of Product A and two hours to make one unit of Product B. The following information is available:

Product A Product B
Units produced from capacity available 100,000 50,000
Contribution margin per unit $20 $30

If capacity is the limiting factor, which product should be produced?

User Wolf War
by
8.6k points

1 Answer

5 votes

Answer:

Company A produce 100,000.

Step-by-step explanation:

According to the question , the computation is shown below:-

Particulars Product A Product B

Contribution margin per unit $20 $30

Hours per unit 1 2

Contribution margin per unit 20 15

As we can see that the company A produces 100,000 and the same is the answer

User Krotton
by
8.7k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.