CORRECT ANSWER B. THE MAXIMUM CONTRIBUTION MARGIN THAT CERVINE...

213.

Correct answer b. The maximum contribution margin that Cervine can generate is $689,992 as

shown below.

Contribution Product A

= $100 - $53 - $10

= $37

Contribution Product B

= $80 - $45 - $11

= $24

Hours Product A

= 10,000 units x 2 hours

= 20,000 hours

Units Product B

= (40,000 hrs. – 20,000 hrs.) ÷ 1.5

= 13,000 units

Contribution

= ($37 x 10,000) + ($24 x 13,333)

= $689,992