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Question 24.8: Product A has a unit contribution margin of $15. Product B h...

Product A has a unit contribution margin of $15. Product B has a unit contribution margin of $20. Product A requires three furnace hours, while Product B requires five furnace hours. Determine the most profitable product, assuming the furnace is a constraint. 

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Product A Product B
Unit contribution margin………………………………… $15 $20
Furnace hours per unit …………………………………………… ÷3 ÷ 5
Unit contribution margin per production bottleneck hour …………………………………………… \underline{\underline{\$ \ 5}} \underline{\underline{\$ \ 4}}

Product A is the most profitable in using bottleneck resources.

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