Sand Canyon Enterprises is analyzing its sales mix to find out if it is maximizing its profits. The company produces three similar items: X, Y, and Z. All three of these products are made with the same equipment, and maximum productive capacity measured in machine hours is now being used. Products line statistics are as follows:

The current production capacity is 3,000,000 machine hours.
PART 1
Determine whether the existing sales mix is the most possible. If your answer is no, offer your suggestion to improve the sales mix. Round answers to two decimal places.
PART 2
How many of each product should be manufactured and sold to maximize the company's contribution margin based on the current production activity of 3,000,000 machine hours? What is the total contribution margin for that combination?

Transcribed Image Text:

Current sales demand (units) Machine hours per unit Selling price per hour Unit variable cost 95,000 105,000 158,000 5 13 10 $63 $48 $84 $49 $33 S26 Unit variable selling cost $17 S13 $16