Brittany Furniture manufactures two products: Futons and Recliners. The following data are available: The company can manufacture two futons per machine hour and one recliner per machine hour. The company's production capacity is 900 machine hours per month.
What is the contribution margin per machine hour for futons?

Question

Brittany Furniture manufactures two products: Futons and Recliners. The following data are available:  The company can manufacture two futons per machine hour and one recliner per machine hour. The company's production capacity is 900 machine hours per month.
What is the contribution margin per machine hour for futons?

Quizplus · Accepted Answer

To calculate the contribution margin per machine hour for futons, we need to first calculate the contribution margin per unit for futons. 
From the information given in the question, we know that the contribution margin for futons is $300 per unit. 
We also know that the company can manufacture two futons per machine hour. 
So, the contribution margin per machine hour for futons = Contribution margin per unit for futons * Number of futons manufactured per machine hour 
= $300 per unit * 2 futons per machine hour = $600 per machine hour 
Therefore, the contribution margin per machine hour for futons is $600.

The best choice(s) cannot be determined from the information given in the question. Additional information about the demand and profitability of each product would be needed to make the best decision.

Brittany Furniture Manufactures Two Products: Futons and Recliners