Problem 2 Data regarding four different products manufactured by an organization are presented below. Direct...
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Problem 2 Data regarding four different products manufactured by an organization are presented below. Direct materials and direct labor are readily available from the respected resource markets. However, the manufacture is limited to a maximum of 3,000 machine hours per month. Product A Product B Product C Product D P 25 P 18 P 20 P 25 Selling price per unit Variable cost/unit 17 11 10 16 Units produced per machine hour 3 4 2 3 Required: Answer the following questions. 1. Compute the contribution margin per limited resource. Rank the four products according to priority in production. How much is the total contribution margin to be earned by the company if it produces only the most profitable product. 2. Assume that the market limit for the products are as follows. A 7,200 units; B - 1,500 units and C - 1,200 units. What is the optimum product mix and how much is the total contribution margin to be earned by the company from the product mix
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