I need help with this practice question Please show me all t

I need help with this practice question! Please show me all the work for it!

Blue Corporation uses a machine to produce products Y and Z.  Currently, Blue sells these products in bundles of 2 product Y and 1 product Z per bundle.  Given Blue’s current capacity, they are able to use the machine for a total of 2,000 hours per year.  Information on product Y and Z is presented below:

Product Y                                Product Z

Sales Price                               $1,000                                     $1,500

Variable Costs                         $300                                        $600

Machine hours per unit          7 hours                                    10 hours

Assuming that Blue will sell every unit that it produces (this is one of the weaknesses of CVP analysis), should Blue continue selling in bundles of Y and Z, sell on product Y or sell only product Z?  Why?

Solution

Product Y Product Z Sale Price $1,000 $1,500 Variable cost $300 $600 Contribution mArgin per unit C $700 $900 Machine Hours per unit M 7 10 Contribution mArgin per machine hour C/M $100 $90 Now it has 2000 hours Current its selling in bundle of 2:1 So hours used Hours used CM Total CM Product Y 2000/3*2 1333 $100 $133,300 Product Z 2000/3*1 667 $90 $60,030 Total contribution Margin $193,330 Now CM per mchine hour is more for Product Y hence if that is only produced than CM would be Product Y 2000*100 $200,000 If we produce only Product Z tha CM would be 2000*90 $180,000 So as from all the three above options contribution margin Is highest if Product Y is produced so the Company should produce Product Y and generate CM of $200000 If any doubt please comment