Genesis Company manufactures digital televisions and computer monitors. The limiting resource for the company is 7,200 hours per month. Televisions have a contribution margin per unit of $400 and computer monitors have a contribution margin per unit of $100. Machine hours per unit for televisions and monitors are 0.80 and 0.25, respectively. If Genesis is able to increase machine capacity to 7,500 hours and increase the production of only one of these products, what amount of contribution margin is available under each alternative for the additional 300 hours?
Pick one option -
Digital TVs Computer Monitors
$150,000 $120,000
$96,000 $7,500
$500 $400
$120,000 $30,000