The Garrison Company manufactures two products: Oxy Cleaner and Sonic Cleaner. The costs and revenues are...
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The Garrison Company manufactures two products: Oxy Cleaner andSonic Cleaner. The costs and revenues are as follows:
Oxy Cleaner Sonic Cleaner Sales Price $ 75 $ 44 Variable cost per unit 40 21
Total demand for Oxy is 10,000 units and for Sonic is 6,000 units.Machine time is a scarce resource. During the year, 50,000 machinehours are available. Oxy requires 4 machine hours per unit, whileSonic requires 2.5 machine hours per unit.
What is the maximum contribution margin Garrison can achieve duringa year?
$444,250.
$1,014,000.
$488,000.
$855,500.
The Garrison Company manufactures two products: Oxy Cleaner andSonic Cleaner. The costs and revenues are as follows:
| Oxy Cleaner | Sonic Cleaner | |||||
| Sales Price | $ | 75 | $ | 44 | ||
| Variable cost per unit | 40 | 21 | ||||
Total demand for Oxy is 10,000 units and for Sonic is 6,000 units.Machine time is a scarce resource. During the year, 50,000 machinehours are available. Oxy requires 4 machine hours per unit, whileSonic requires 2.5 machine hours per unit.
What is the maximum contribution margin Garrison can achieve duringa year?
$444,250.
$1,014,000.
$488,000.
$855,500.
Answer & Explanation Solved by verified expert
3.9 Ratings (389 Votes)
Machine time is a scarce resource Time is Key factor so we need to calculate first contribution per machine hour oxy cleaner 1 unit 4 hour sonic Cleaner 1 unit 25 hour
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