The Garrison Company manufactures two products: Oxy Cleaner and Sonic Cleaner. The costs and revenues are as follows:
| |
Oxy Cleaner |
|
Sonic Cleaner |
|
| Sales Price |
$ |
85 |
|
$ |
48 |
|
| Variable cost per unit |
|
45 |
|
|
25 |
|
Total demand for Oxy is 11,200 units and for Sonic is 7,200 units. Machine time is a scarce resource. During the year, 62,000 machine hours are available. Oxy requires 5 machine hours per unit, while Sonic requires 2.5 machine hours per unit.
What is the maximum contribution margin Garrison can achieve during a year?
$613,600.
$1,297,600.
$1,066,400.
$517,600.