Question

Bramble Corp. can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution margin of $58 and takes two machine hours to make and Fancy has a unit contribution margin of $57 and takes three machine hours to make. There are 2400 machine hours available to manufacture a product. What should Bramble do?

Answer 1

plain makes a profit of $10

Step-by-step explanation:

The computation is shown below:

Particulars Plain fancy

Unit contribution margin $58 $57

Machine hours 2 3

Contribution margin

per machine hour $29 $19

($58 ÷ 2) ($57 ÷3)

As we can see that the plain makes a profit of $10 that comes from

= $29 - $19

= $10