Ask Question
BusinessBusiness
28 September, 14:20

Knowledge Check 01 Product A Product B Selling price per unit$20 $15 Variable cost per unit 12 9 Contribution margin per unit$8 $6 Labor time4 minutes 2 Minutes Roberto, Inc. manufactures products A and B. Both products have a contribution margin ratio of 40%. Assume that labor time is the constrained resource and only a total of 3,000 minutes is available. Product A has a total demand of 500 units and product B has a total demand for 600 units. Considering the constraint, how many units of product B should be produced to maximize profits

+4
Answers (1)
  1. 28 September, 17:29
    0
    600 units

    Explanation:

    Determine the Contribution per limiting factor for the 2 products

    Product A

    Contribution per limiting factor = Contribution per unit / Amount of Limiting Factor required per unit

    = $8 / 4

    = $ 2

    Product B

    Contribution per limiting factor = Contribution per unit / Amount of Limiting Factor required per unit

    = $6 / 2

    = $ 3

    From the Contribution per limiting factor for the 2 products it can be seen that Product B has the highest Contribution per limiting factor and should be manufactured first follows by Product A.

    Thus total demand of 600 units will be satisfied.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Knowledge Check 01 Product A Product B Selling price per unit$20 $15 Variable cost per unit 12 9 Contribution margin per unit$8 $6 Labor ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Uncertainty about interest-rate movements and returns is called Question 3 options: A) market potential. B) interest-rate irregularities. C) interest-rate risk. D) financial creativity.
Answers (1)
Debra wanted to form a partnership with lawrence. he agreed and they became co-owners in an equal partnership. this year, after expenses, the partnership had a profit of $200,000. how will the taxation of this profit be handled?
Answers (1)
10-7. Implied contracts. Ralph ramsey insured his car with allstate insurance co. He also owned a house on which he maintained a homeowner's insurance policy with allstate.
Answers (1)
Joni's Kitty Supplies applies manufacturing overhead costs to products at a budgeted rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy Mouse product.
Answers (1)
Suppose the economy is initially at potential output and the quantity of aggregate output supplied increases. What information would you need to determine whether this was due to a movement along the SRAS curve or a shift of the LRAS curve?
Answers (1)
New Questions in Business
Suppose a firm has 10 million shares of common stock outstanding and seven candidates are up for election to three seats on the board of directors.
Answers (1)
How is globalization affecting the hospitality industry? Give specific examples of some of the changes.
Answers (1)
A pure project organizational structure minimizes the duplication of resources.
Answers (1)
A property is being appraised by the Cost Approach. The appraiser estimates that the land is worth $33,000 and the replacement cost of the home is $110,000. A new $20,000 garage was recently added. Total depreciation from all causes is $7,000.
Answers (1)
Will feckless unexpectedly inherits $10,000 from a rich uncle. he is observed to consume fewer hamburgers than he used to.
Answers (1)
Home » Business » Knowledge Check 01 Product A Product B Selling price per unit$20 $15 Variable cost per unit 12 9 Contribution margin per unit$8 $6 Labor time4 minutes 2 Minutes Roberto, Inc. manufactures products A and B.
Sign Up Forgot Password?