Question: Xcelerate Productions Inc. manufactures and sells three different products of different qualities. They are referred to as: Normal, High, and Superior. The accounting department provides the following information on these products:
Normal High Superior
Selling price per unit $34 $41 $57
Variable costs per unit $28.67 $35 $53
Contribution margin per unit $5.33 $6.00 $4.00
Machine hours required 0.02 0.04 0.08
If the limited resource can be increased by 700 hours, calcuate the maximum increase in the contribution margin. Assume that xcelera can sell all products manufactured.