Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 17

The product mix decision Product S has a contribution margin of $150 per unit and requires three hours of machine time. Product T requires four hours of machine time and provides $200 of contribution margin per unit.

Required:

If the capacity of machine time is limited to 600 hours and only one product can be produced, what is the maximum amount of contribution that could be generated?