Question

Selection of sales mix LO A1 Excel Memory Company can sell all units of computer memory X and Y that it can produce, but it has limited production capacity. It can produce two units of X per hour or three units of Y per hour, and it has 4,900 production hours available. Contribution margin is $6 for product X and $5 for product Y 1. Calculate contribution margin per production hour

Answer 1

Answer:

Contribution margin per production hour for product X = $12

Contribution margin per production hour for product X = $15

Explanation:

The computation of contribution margin per production hour is given below:-

                                                                Product X   Product Y

Contribution margin per unit                        $6             $5

Units produced per hour                               2                  3

Contribution margin per production hour $12            $15

Working note =

Contribution margin per production hour  for product X = Contribution margin per unit × Units produced per hour

= $6 × 2

= $12

Contribution margin per production hour  for product Y = Contribution margin per unit × Units produced per hour

= $5 × 3

= $15