An entity manufactures 4 products:
A 
C 
E 
F 

CM/Unit 
$20.28 
$30.47 
$26.20 
$36.91 

Kg of Y used 
1 
6 
10 
2 

KG of X used 
3.00 
4.00 
8.71 
7.51 

Expected demand (units) 
3907 
1823 
847 
3988 
Material X is very scarce and it is anticipated that only 24026 kg
will be available next year. There is expected to be 200,000 kg of
material Y available. What is the maximum contribution margin that
can be achieved next year?
Select one:
a. $149860
b. $281978
c. $159419
d. $224935
The Porter Company manufactures two products: A100 and A101. Each product uses skilled labour and the total hours of skilled labour available for the following year is limited to 9029 hours. Data for each of the two products is as follows: 

A100 
A101 

Contribution margin per unit 
$36 
$48 

Hours of skilled labour per unit 
1 
2 

Maximum product demand (units) 
5722 
10365 

What is the maximum contribution margin that can be achieved next year? 
Select one:
a. $325044
b. $216696
c. $285360
d. $449424
1) Contribution margin per kg of X
A  C  E  F  
CM/Unit  20.28  30.47  26.20  36.91 
Material X per unit  3  4  8.71  7.51 
CM/Material X  6.76  7.6175  3.00  4.91 
Rank  2  1  4  3 
Optimum use :
Kg  Unit  
Product C  1823*4 = 7292  1823 
Product A  3907*3 = 11721  3907 
Proudct F  (2402619013) = 5013  5013/7.51 = 667.50 Units 
Maximum contribution = (1823*30.47+3907*20.28+667.50*36.91) = 159419
So answer is c) $159419
2)
Contribution margin per hour
A100  A101  
Contribution margin  36  48 
Hour per unit  1  2 
Contribution margin per hour  36  24 
Rank  1  2 
Maximum contribution margin = 5722*36+ (90295722/2)*48 = 285360
So answer is c) $285360
Get Answers For Free
Most questions answered within 1 hours.