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In Zhuang LTD , data concerning two products are Contribution margin per unitProduct A $10, Product B $12; machine hours required for one unitProduct A 2, Product B 3.

a) Calculate the contribution margin per unit of the limited resource for each product:

Product A: $ Answer per hour Product B: $ Answer per hour

b) If Zhuang LTD has a limited number of machine hours and can sell all the units produced of either product, which product should it produce, Product A or Product B?

Zhuang LTD has a maximum of 12,000 machine hours available for production of Products A and B.

c) How many units of product A can the company produce in the 12,000 machine hours?

Answer units

d) How many units of product B can the company produce in the 12,000 machine hours?

Answer units

Zhuang LTD must produce a minimum of 1,500 units of Product B but may use any remaining machine hours to produce and sell either Product A or Product B or any combination of the two products.

e) What is the total contribution margin that Zhuang LTD will generate making and selling the 1,500 units of Product B?

$ Answer

f) Given that they must make at least 1,500 units of Product B, what is the maximum contribution margin that Zhuang LTD can generate with 12,000 machine hours?

$ Answer

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