Figure 20-4
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:

-Refer to Figure 20-4. 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

Figure 20-4
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:
 
-Refer to Figure 20-4. 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 given by the second column of the time requirements table. For A, it is 3 machine hours per unit and for B, it is 5 machine hours per unit. Therefore, the constraint on machine hours can be expressed as 3A + 5B ≤ 300. This is option B.

Figure 20-4 Montgomery Company Produces a and B with Contribution Margins Per