Major competitor of Asia Builders, Inc. has just folded up its operations and the company has found itself operating at peak capacity. The following data were on hand regarding its two products: 

                                       Product A             Product B 

Unit sales price               P200                       P500 

Unit variable costs         150                            420 

Machine hours required 24 

The firm has available 200,000 machine hours per month.

 Its total monthly fixed costs amount to P500,000. 

Assuming that there is no market limitation, which product should Panay Corporation produce?

Answer rating: 100% (QA)

To determine which product Panay Corporation should produce we can calculate the contribution margin ... View the full answer