Problem: Speedy Co. manufactures four products. Direct materials and direct labour are available in sufficient quantities, but machine capacity is limited to 3,000 hours. Cost and revenue data for the four products are given below:
A B C D
Selling price per unit 36 42 46 56
Variable cost 19 16 25 37
Units produced per 3 4 2 3
machine hour
Based on your calculations, which of the four products which is the most profitable for Speedy Co.?
A. Product A.
B. Product B.
C. Product C.
D. Product D.