Contribution margin for product a is $15 and for b is $12 while machine time require for a is 2 minutes and for b is 1 minute. Solve it out.
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If you look over the profit margin per unit of the constrained
units then it will be calculated by dividing 15 with 2 and 12 by 1. This gives
contribution profit margin per unit of the constrained units of product a as $7.5
and product b as $12. So calculation supports that the company should go for
the product b. For more information click on the link: contribution margin
answered 5 months ago
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