Computation of Income if :-
Product A is made-
Unit Contribution = $16
Time = 2 machine hours
Total Available machine hours = 5000 hours
Units of Product A that can be produced = 5000 hours/ 2 hours = 2500 units
Contribution = 2500 units x $16 =$40000
Product B is made-
Unit Contribution = $30
Time = 3 machine hours
Total Available machine hours = 5000 hours
Units of Product A that can be produced = 5000 hours/ 3 hours = 1666.67 units (approx.)
Contribution = 2500 units x $30=$50000
So, the correct answer would be Option C i.e. income will be $10000 less if product A is made.
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