Dye Company can sell all the units it can produce of either Plain or Fancy...
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Accounting
Dye Company can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution margin of $96 and takes two machine hours to make and Fancy has a unit contribution margin of $120 and takes three machine hours to make. There are 2,400 machine hours available to manufacture a product. What should Dye do?
Question 10 options:
| The same total profits exist regardless of which product is made. | |
| Make Plain because more units can be made and sold than Fancy. | |
| Make Plain which creates $8 more profit per machine hour than Fancy does. | |
| Make Fancy which creates $24 more profit per unit than Plain does |
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