Question:
MEM manufactures two products. Product X has a contribution margin of $26 and requires 4 hours of machine time. Product Y has a contribution margin of $14 and requires 2 hours of machine time. Assuming that machine time is limited to 3,000 hours, how should it allocate the machine time to maximize its income?
(a) Use 1,500 hours to produce X and 1,500 hours to produce Y.
(b) Use 2,250 hours to produce X and 750 hours to produce Y.
(c) Use 3,000 hours to produce only X.
(d) Use 3,000 hours to produce only Y.