Question

Multiple Choice Question 76 Acompany can sell the unit can produce o ther Product A or Product but not both Product A has a contribution margin of $12 and takes two machine hours to make and Product has sunt contribution margin of $27.0 and takes the machine hours to make. If there are 5000 machine hours avable to manufacture a product, income will be the same faither product is made $15000 less Product is made $15000 more Product A is made $15000 less Product is made

Answer 1

Correct answer-----------$15,000 less if product A is made

Working

Data for Calculations and Statement of Ranking
	A	B
Contribution Margin	$          12.00	$          27.00
machine Hours Per unit	2	3
Contribution margin per machine hour	$            6.00	$            9.00
Rank	II	I

.

	A	B
Contribution margin per unit	$          12.00	$          27.00
Multiplied by Maximum units that can be sold using 5000 machine hours	2,500	1,667
Total Contribution margin	$ 30,000.00	$ 45,000.00