Roberto, Inc. manufactures products A and B. Both products have a contribution margin ratio of 40%. Information about both products follows. Product A Product B Selling price per unit Variable cost per unit 20 $ 15 12 9 Contribution margin per unit $ 8 Labor time 4 minutes 2 Minutes 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? O 500 units 450 units O 550 units 600 units

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Can you show me how to work this problem? I thought that I would multiplied the demand for unit B which is $600 by the contribution margin per labor time which I thought was three.
Roberto, Inc. manufactures products A and B. Both products have a contribution margin ratio of 40%. Information about both products
follows.
Product A
Product B
Selling price per unit
Variable cost per unit
20
$ 15
12
9
Contribution margin per unit
8
Labor time
4 minutes
2 Minutes
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?
O 500 units
450 units
O 550 units
O 600 units
Transcribed Image Text:Roberto, Inc. manufactures products A and B. Both products have a contribution margin ratio of 40%. Information about both products follows. Product A Product B Selling price per unit Variable cost per unit 20 $ 15 12 9 Contribution margin per unit 8 Labor time 4 minutes 2 Minutes 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? O 500 units 450 units O 550 units O 600 units
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