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    Constrained resource

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    A company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $16 and takes two machine hours to make and Product B has a unit contribution margin of $30 and takes three machine hours to make. If there are 1,000 machine hours available to manufacture a product, what will the income be?

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    https://brainmass.com/business/human-resources-management/constrained-resource-product-249813

    Solution Preview

    When there is a constrained resource, we calculate the contribution margin per unit of constrained resource and produce those items which have the higher contribution margin per unit of constrained ...

    Solution Summary

    The solution provides a step-by-step explanation on a production decision when there is a constrained resource. The solution discovers which product, Product A vs. Product B, would generate a higher income for the company.

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