Question - Mars Company manufactures and sells three products. Relevant per unit data concerning each product are given below.
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Product
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A
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B
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C
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Selling price
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$8
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$15
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$20
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Variable costs and expenses
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$5
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$12
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$17
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Machine hours to produce
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2
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1
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2
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Compute the contribution margin per unit of limited resource (machine hours) for each product.
Assuming 3,000 additional machine hours are available, which product should be manufactured?
What is the total contribution margin if the hours are (1) divided equally amoung the products and (2) if they' are allocated entirely to the product identified above.