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Consider the following production and cost data for two products, X and Y, manufactured by Alphabet Company.
| | | Product X | Product Y |
| | Sales price per unit....................................... | $52 | $40 |
| | Direct materials cost per unit.. | $18 | $8 |
| | Direct labor hours per unit | 1.5 hours | 1 hour |
| | Machine-hours needed per unit...................... | 3 hours | 2 hours |
| | | | |
The labor rate is $10 per hour.
Variable overhead is $2 per direct labor hour.
The company has 15,000 machine hours available each period, and there is unlimited demand for each product.
What is the largest possible total contribution margin that can be realized each period?
| | A. | $150,000 |
| | B. | $120,000 |
| | C. | $111,000 |
| | D. | $124,000 |
| | E. | $105,000 |
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