Question

Metropole Inc. can produce three different products interchangeably on two machines. The accounting department provides the following information on these products:

A B C Selling price per unit $23 $37 $43
Variable costs per unit $12 $29 $35
Units produced per machine hour 10 12.5 20
Minimum units produced 105 none 145
Maximum units produced 220 none 240
The total machine hours available are 100.
(a) Determine the number of machine hours per unit for each product. (Round answers to 2 decimal places, e.g. 1.25. - solved
(b) Determine the contribution margin per machine hour for each product. (Round answers to 2 decimal places, e.g. 15.25.)
(c) Determine how many units of each product should be produced and the total contribution margin:

Answer 1