Smythe Manufacturing has 27,000 labor hours available for producing X and Y. Consider the following information: $\begin{array}{lcc}&\text { Product X } &\text { Product Y }\
\text { Required labor time per unit (hours) } & 2 & 3 \
\text { Maximum demand (units) } & 6,000 & 8,000 \
\text { Contribution margin per unit } & \$ 5.00 & \$ 6.00 \
\text { Contribution margin per labor hour } & \$ 2.50 & \$ 2.00
\end{array}$ If Smythe follows proper managerial accounting practices, which of the following production schedules should the company set? $\begin{array}{ll}\text { Product X } & \text { Product Y }\
\text { A. } 0 \text { units } & 8,000 \text { units } \
\text { B. } 1,500 \text { units } & 8,000 \text { units } \
\text { C. } 6,000 \text { units } & 0 \text { units } \
\text { D. } 6,000 \text { units } & 5,000 \text { units } \
\text { E. } 6,000 \text { units } & 8,000 \text { units }
\end{array}$
A) Choice A
B) Choice B
C) Choice C
D) Choice D
E) Choice E

Question

Quizplus · Accepted Answer

The optimal production schedule maximizes the contribution margin while staying within labor hour constraints. Producing 6,000 units of X and 5,000 units of Y uses exactly 27,000 labor hours (6,000*2 + 5,000*3) and maximizes the contribution margin.

Smythe Manufacturing Has 27,000 Labor Hours Available for Producing X