The Dash Company Manufactures Two Products: a and B There Are 5,000 Machine Hours Available During the Quarter

Essay

The Dash Company manufactures two products: A and B. Information about the products is as follows: $\begin{array}{lrr}&\text { Product A } & \text { Product B }\\\text { Revenue per unit } & £ 150 & £ 125 \\\text { Variable costs per unit } & -80 & -70 \\\text { Contribution margin per unit } & \underline{£ 70} & \underline{£ 55}\\\\\text { Total demand } & 15,000 \text { units } & 12,000 \text { units } \\\text { Machine hours per unit } & .5 \mathrm{MH} & .25 \mathrm{MH}\\\end{array}$
There are 5,000 machine hours available during the quarter.

Required:
a.Which of the products should Dash Company produce if it can only produce one of the products?
b.Assume that Dash Company uses half of the hours available to produce Product A and half of the hours available to produce Product B. What is Dash's total contribution margin?
c.Assume that Dash Company produces the product mix that will maximize profit. What is Dash's total contribution margin?