Harzog Industries produces three products, as shown below.

Because of a recent fire that destroyed a small section of the factory, Harzog has only 250,000 laminating hours available for the coming month's production schedule.
How many units of each product should be produced to maximize contribution margin?
Product A units
Product B units
Product C units
2. Assume that Harzog (see previous question) has obtained a new piece of equipment that will be used only in the production of product B. this new equipment will increase the variable cost per unit to $100, but it will reduce the number of laminating hours required for product B by half. The new equipment will not affect the total number of laminating hours available. How does the acquisition of this new equipment affect Harzog's planned production? Be specific.

Transcribed Image Text:

B $75 $130 $30 Sales price Variable cost per unit 40 90 15 $ 40 $35 $15 Contribution margin Laminating hours per 5 2 unit Monthly demand (units) 30,000 15,000 10,000