Answer:
Product G Product B
Selling price per unit $150 $180
Variable costs per unit $60 $108
Contribution margin per unit $90 $72
Machine hours to produce 1 unit 0.4 hours 1.0 hours
Maximum unit sales per month 550 units 200 units
1)
Contribution margin per = $90 / 0.4 = $72 / 1
machine hour = $225 = $72
2)
total operating hours per 176 hours
month
units produced 440 units 0 units
contribution margin $39,600 $0
Since Product G generates a much higher contribution margin per machine hour, all the available machine hours (176) should be used to produce it. That would result in 440 units produced and $39,600 generated as contribution margin.