Knowledge Check 01 Product A Product B Selling price per unit$20 $15 Variable cost per unit 12 9 Contribution margin per unit$8 $6 Labor time4 minutes 2 Minutes Roberto, Inc. manufactures products A and B. Both products have a contribution margin ratio of 40%. Assume that labor time is the constrained resource and only a total of 3,000 minutes is available. Product A has a total demand of 500 units and product B has a total demand for 600 units. Considering the constraint, how many units of product B should be produced to maximize profits

600 units

Explanation:

Determine the Contribution per limiting factor for the 2 products

Product A

Contribution per limiting factor = Contribution per unit / Amount of Limiting Factor required per unit

                                                   = $8 / 4

                                                   = $ 2

Product B

Contribution per limiting factor = Contribution per unit / Amount of Limiting Factor required per unit

                                                   = $6 / 2

                                                   = $ 3

From the Contribution per limiting factor for the 2 products it can be seen that Product B has the highest Contribution per limiting factor and should be manufactured first follows by Product A.

Thus total demand of  600 units will be satisfied.

i'm pretty sure the answer is 60.

answer; offer in store wine and beer samples;