Consider the following production and cost data for two products,L and C:
The company can only perform 65,000 machine set-ups each period due to limited skilled labor and there is unlimited demand for each product.What is the largest possible total contribution margin that can be realized each period?
A)$845,000
B)$975,000
C)$910,000
D)$1,820,000

Question

Quizplus · Accepted Answer

Number of units of Product C that can be produced each period = 65,000 set-ups ÷ 8 set-ups per unit = 8,125 units
Total contribution margin = $120 per unit × 8,125 units = $975,000

Consider the Following Production and Cost Data for Two Products,L