Problem $23-3$A

Sales mix strategies

P$3$

Edge Company produces two models of its product with the same machine. The machine has a capacity of $176$ hours per month. The following information is available.

Required

$1.$ Determine the contribution margin per machine hour for each model.

$2.$ How many units of each model should the company produce? How much total contribution margin does this mix produce per month?

$3.$ Assume the maximum demand for the Standard model is $100$ units $($not $600$ units$).$ How many units of each model should the company produce? How much total contribution margin does this mix produce per month?