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