Question: Magic Products Limited makes three products, each requiring two machine hours per unit to produce. The company has maximum machine hour of 40,000 hours.

Magic Products Limited makes three products, each requiring two machine hours per

Magic Products Limited makes three products, each requiring two machine hours per unit to produce. The company has maximum machine hour of 40,000 hours. The following information has been provided by the Sales Department in relation to each product: Budgeted sales units Selling price per unit Variable costs per unit Marco 10,000 $12 $6 Mezzo 7,500 $16 $7 Micro 5,000 $18 $4 Required (a) Identify liming factor. (b) Calculate the contribution margin of each product. (c) Calculate contribution of each product and rank the product for production. (d) How should the company arrange its products for manufacture in order to maximize profitability?

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