Montgomery Company produces A and B with contribution margins per unit of $40 and $30, respectively. Only 500 labor hours and 300 machine hours are available for production. Time requirements to produce one unit of A and B are as follows: $\begin{array}{lcc}
& \text { Product A } & \text { Product B } \
\text { Labor hours per unit } & 6 & 3 \
\text { Machine hours per unit } & 2 & 5
\end{array}$
What is the constraint on labor hours for Montgomery Company?
A)6A + 3B ? 500
B)6A + 2B ? 500
C)2A + 5B ? 300
D)40A + 30B ? 500

Question

Montgomery Company produces A and B with contribution margins per unit of $40 and $30, respectively. Only 500 labor hours and 300 machine hours are available for production. Time requirements to produce one unit of A and B are as follows: $\begin{array}{lcc} 
& \text { Product A } & \text { Product B } \
\text { Labor hours per unit } & 6 & 3 \
\text { Machine hours per unit } & 2 & 5
\end{array}$
What is the constraint on labor hours for Montgomery Company?
A)6A + 3B ? 500
B)6A + 2B ? 500
C)2A + 5B ? 300
D)40A + 30B ? 500

Quizplus · Accepted Answer

The constraint on labor hours is determined by the time requirements for labor to produce one unit of each product. For Product A, it takes 6 labor hours per unit, and for Product B, it takes 3 labor hours per unit. Given that only 500 labor hours are available, the constraint is represented by the equation 6A + 3B ≤ 500, where A and B are the quantities of Product A and B, respectively.

Montgomery Company Produces a and B with Contribution Margins Per