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 machine hours for Montgomery Company?
A)2A + 5B ? 500
B)2A + 5B ? 300
C)6A + 3B ? 500
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 machine hours for Montgomery Company?
A)2A + 5B ? 500
B)2A + 5B ? 300
C)6A + 3B ? 500
D)40A + 30B ? 500

Quizplus · Accepted Answer

The constraint on machine hours is determined by the time requirements for machine hours per unit for both products A and B, which are 2 and 5 hours respectively, and the total available machine hours, which are 300. Therefore, the constraint is 2A + 5B ≤ 300.

Montgomery Company Produces a and B with Contribution Margins Per