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Carlton can hire only two full-time employees, but he needs even more help to make the two products he sells. Product alpha has a contribution margin per unit of limited resource of $750 and a unit contribution margin of $600. Product beta has a contribution margin per unit of limited resource of $975 and a unit contribution margin of $400. Carlton thinks he will be able to afford hiring an extra employee to work 150 hours per month, but he is unsure which product to have the employee work on. Which product would result in the highest additional contribution margin?.

Respuesta :

The product that would result in the highest contribution margin is; Product Beta

What is contribution Margin?

In this question, we see that production is limited by a particular resource named Labor work Hours.

Now,  to determine the product to manufacture, Carlton has to rank the Contribution per unit of the limiting factor which is either labor of Product Alpha or  Product Beta.

Contribution per limiting factor is gotten from:

Product Alpha;  $750 per unit of limited resource

Product Beta; $975 per unit of limited resource

Finally, the Product with highest Contribution per limiting factor will be the one with the highest contribution margin and must be first to be worked upon.

Read more about Contribution Margin at; https://brainly.com/question/17030629

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