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Question - Paulson Company has only 25,000 hours of machine time each month to manufacture its two products. Product X has a contribution margin of P50, and Product Y has a contribution margin of P64. Product X requires 5 hours of machine time, and Product Y requires 8 hours of machine time.
1. How many units of the priority product will be produced if Paulson wants to dedicate 80 percent of its machine time to this product?
2. If Paulson Company wants to dedicate 80 percent of its machine time to the most profitable product, how much is the total contribution margin to be earned by this product?
3. If Paulson Company wants to dedicate 80 percent of its machine time to the product that will provide the most income, how much is the total contribution margin to be earned from the second product?
4. If Paulson Company wants to dedicate 80 percent of its machine time to the product that will provide the most income, the company will have a total contribution margin?
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