Rief Exercise 6-11 In Marshall Company, data concerning two products are unit contribution margin—Product A $10, Product B $12; machine hours required for one unit—Product A 2, Product B 3. Compute the contribution margin per unit of limited resource for each product.

Product A -$5

Product B-$4

Explanation:

Apart from the contribution for products A and B given in the question,the other details are the machine hours required to produce one unit of A and B,which implies that the limited resource is the machine hour provided alongside the contribution

The contribution per unit of limiting factor or resource is computed thus:

                                                                      Product A                   Product B

Contribution                                                           $10                          $12

Limiting resource(hour)                                            2                              3

Contribution/resource(contribution/resource)        $5                          $4  

In other words it would be better to give product preference in production since it has a higher contribution per unit of scarce resource                    

answercombination of ability and experience of the partners;