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Largest possible Total Contribution Margin

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Consider the following production and cost data for two products, X and Y:

Product X: contribution margin of $24 per unit and 3 machine hours per unit.

Product Y: contribution margin of $18 per unit and 2 machine hours per unit.

The company has 15,000 machine hours available each period, and there is unlimited demand for each product. What is the largest possible total contribution margin that can be realized each period?

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Solution Summary

The solution computes the largest possible total contribution margin for a company

$2.19