2. (20 pts) A tool company sells a plain (price $50, variable cost $35) and a professional (price…

2. (20 pts) A tool company sells a plain (price $50, variable cost $35) and a professional (price…

2. (20 pts) A tool company sells a plain (price $50, variable cost $35) and a professional (price $100, variable cost $60) circular saw. It takes one machine-hour to produce a professional and 15 minutes to produce a regular saw. There are 40,000 machine-hours available and demand is more than they can produce. a) Compute contribution margins and contribution margin ratios for each saw. b) Ifall machine hours are used, compute the total contribution margin for plain saws only and professional saws only. Which saw should be produced?

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