Contribution Margin with Resource Constraints
CyclePath Company produces two different products that have the following price and cost characteristics
		Bicycle	Tricycle
	Selling price per unit	200	100
	Variable cost per unit	120	50
Management believes that pushing sales of the Bicycle product would maximize company profits because of the high contribution margin per unit for this product . However, only 50,000 labor hours are available each year, and the Bicycle product requires 4 labor hours per unit while the Tricycle model requires 2 labor hours per unit. The company sells everything it produces.
Required:
a	Calculate the contribution margin per unit of constrained resource for each model
	DL Hours Available
		Bicycle	Tricycle	Total
	Sales
	Less: Variable
	Contribution Margin
	Hours needed
	CM per constrained resouce
b	Which model would CyclePath prefer to sell to maximize overall company profit? Explain.
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