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Which product should be eliminated to maximize profit

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Reference no: EM132614588

Because of limited production capacity the Northeast Division of a pharmaceutical company needs to prioritize the production of the two most profitable drugs. The controller has provided the following information to aid the decision.

                                                                Product A               Product B                     Product C

Contribution Margin per package            $12.00                 $15.00                        $7.50

Machine hours per package                     2.5                          4                             1

Required:

Problem 1: Which product should be eliminated to maximize profit?

a. Product A

b. Product B

c. Product C

d. It doesn't make any difference since they are contributing equally.

Reference no: EM132614588

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