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3. Hammer Ltd. manufactures three different product lines: Model A, Model B and Model C The following table contains per-unit data and annual demand for
3. Hammer Ltd. manufactures three different product lines: Model A, Model B and Model C The following table contains per-unit data and annual demand for the models: Model A Model B Model C Minimum demand Maximum demand Selling price Direct materials Direct labour ($12 per hour) Variable support costs ($3 per machine hour) Fixed support costs 1,000 4,000 $100 20 12 1,000 5,000 $85 1,200 6,000 $130 26 24 12 12 40 6 30 30 If there are 30,000 machine hours available per year, how many units of each model should Hammer produce to maximize profits? a) 4,000 of A, 5,000 of B and 2,000 of C b) 1,333 of A, 1,000 of B and 6,000 of C c) 2,000 of A, 0 of B and 6,000 of C d) 0 of A, 3,000 of B and 6,000 of C
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