Pasadena Corp. produces three products, and currently has a shortage of machine hours since one of its two machines is down - only 360 hours are available this month. The selling price, costs, and labor requirements of the three products are as follows: a. What is the contribution margin per unit for each product?
b. What is the contribution margin per machine hour for each product?
c. Assume Pasadena has unlimited demand for each product. Which product should Pasadena focus on producing?

Question

Pasadena Corp. produces three products, and currently has a shortage of machine hours since one of its two machines is down - only 360 hours are available this month. The selling price, costs, and labor requirements of the three products are as follows:  a. What is the contribution margin per unit for each product?
b. What is the contribution margin per machine hour for each product?
c. Assume Pasadena has unlimited demand for each product. Which product should Pasadena focus on producing?

Quizplus · Accepted Answer

The Answer of Pasadena Corp. produces three products, and currently has a shortage of machine hours since one of its two machines is down - only 360 hours are available this month. The selling price, costs, and labor requirements of the three products are as follows:  a. What is the contribution margin per unit for each product?
b. What is the contribution margin per machine hour for each product?
c. Assume Pasadena has unlimited demand for each product. Which product should Pasadena focus on producing?