What is the maximum total contribution margin the company

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Reference no: EM132783201

	Single-wall	Double-wall
Sales price	P250	P375
Direct materials	25	50
Direct labor	20	40
Variable overhead	10	15
Machine hours	2	3

Most of the manufacturing process for the sets is done on machines. There is a maximum of 10,000 machine hours available each year. Sales price per unit of Standard is P900 and Deluxe sales price per unit is P2,000.

Problem 1: What is the contribution margin per unit of limited resource for each type of set?

a. Standard: P125.00 Deluxe: P100.00

b. Standard: P225.00 Deluxe: P250.00

c. Standard: P450.00 Deluxe: P700.00

d. Standard: P112.50 Deluxe: P 87.50

Problem 2: If demand were strong for both sets and the company could sell an unlimited number of either style, how many of which kind(s) of wooden flower pot stand(s) should be produced in order to maximize profits?

a. 2,500 standard sets

b. 1,250 deluxe sets

c. 833 standard sets and 833 deluxe sets

d. 2,500 standard sets and 1,250 deluxe sets

Problem 3: If demand were strong for both sets and the company could sell an unlimited number of either style, what is the maximum total contribution margin the company could have?

a. P 875,000

b. P 281,250

c. P1,125,000

d. P1,750,000

Reference no: EM132783201

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