Marley Corporation makes three products (X, Y, & Z) with the following characteristics: The company has a capacity of 2,000 machine hours, but there is virtually unlimited demand for each product. In order to maximize total contribution margin, how many units of each product should the company produce?
A) 2,000 units of X, 500 units of Y, and 200 units of Z
B) 0 units of X, 0 units of Y, and 200 units of Z
C) 0 units of X, 500 units of Y, and 0 units of Z
D) 1,000 units of X, 0 units of Y, and 0 units of Z

Question

Marley Corporation makes three products (X, Y, & Z) with the following characteristics:  The company has a capacity of 2,000 machine hours, but there is virtually unlimited demand for each product. In order to maximize total contribution margin, how many units of each product should the company produce?
A) 2,000 units of X, 500 units of Y, and 200 units of Z 
B) 0 units of X, 0 units of Y, and 200 units of Z 
C) 0 units of X, 500 units of Y, and 0 units of Z 
D) 1,000 units of X, 0 units of Y, and 0 units of Z

Quizplus · Accepted Answer

11eacbfc_c638_a784_8ffe_61951f609cb0_TB7552_00 Product X generates the most profit per machine-hour, so its production should be maximized. Producing 1,000 units of X would consume all of the available machine hours.

Marley Corporation Makes Three Products (X, Y, & Z) with the Following