Dye Company can sell all the units it can produce of either Plain or Fancy but n

Question

Dye Company can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution margin of $96 and takes two machine hours to make and Fancy has a unit contribution margin of $120 and takes three machine hours to make. There are 2,400 machine hours available to manufacture a product. What should Dye do?

Question 10 options:

The same total profits exist regardless of which product is made.

Make Plain because more units can be made and sold than Fancy.

Make Plain which creates $8 more profit per machine hour than Fancy does.

Make Fancy which creates $24 more profit per unit than Plain does

The same total profits exist regardless of which product is made.

Make Plain because more units can be made and sold than Fancy.

Make Plain which creates $8 more profit per machine hour than Fancy does.

Make Fancy which creates $24 more profit per unit than Plain does

Explanation / Answer

C. Make Plain which creates $8 more profit per machine hour than Fancy does.

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