Harpes-à-Gonds Fourbe-Riz Revenues Variable costs Contribution margin €120,000 42,000 €78,000 €80,000 48,000 €32,000 Contribution margin per machine-hour €78,000 = €52 1,500 €32,000 = €64 500 Since the €80,000 of additional Fourbe-Riz business in February is identical to jobs done in January, it will also have a contribution margin of €64 per machine-hour, which is greater than the contribution margin of €52 per machine-hour from Harpes-à-Gonds. To maximise operating income, Jours-Daim should first allocate all the capacity needed to take the Fourbe-Riz business (1,000 machine-hours) and then allocate the remaining 1,000 (2,000 − 1,000) machine-hours to Harpes-à- Gonds. Jours-Daim’s operating income in February would then be €16,000 as shown below, greater than the €10,000 operating income in January.
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