2C1B EAGLE BRAND INC. PRODUCES TWO PRODUCTS. DATA REGARDING THESE PR...

209.

CSO: 2C1a

LOS: 2C1b

Eagle Brand Inc. produces two products. Data regarding these products are presented

below.

Product X

Product Y

Selling price per unit

$100

$130

Variable costs per unit

$80

$100

Raw materials used per unit

4 lbs.

10 lbs.

Eagle Brand has 1,000 lbs. of raw materials which can be used to produce Products X and

Y.

Which one of the alternatives below should Eagle Brand accept in order to maximize

contribution margin?

a.

100 units of product Y.

b.

250 units of product X.

c.

200 units of product X and 20 units of product Y.

d.

200 units of product X and 50 units of product Y.