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10 August, 08:36

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

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  1. 10 August, 11:43
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    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
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