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A company produces three products A, B and C all of which passes through the same finishing process. For the coming month, the number of
A company produces three products A, B and C all of which passes through the same finishing process. For the coming month, the number of hours available in the finishing process is 6,000 hours. Data relating to each product are as follows.
Product A | Product B | Product C | ||
Selling Price per unit (GH) | 30 | 36 | 41 | |
Variable cost per unit (GH) | 20 | 27 | 35 | |
Processing time per unit (minutes) | 45 | 36 | 25 | |
Maximum Monthly demand (units) | 4500 | 4500 | 4500 | |
Required:
- Calculate the number of minutes needed by each product
- Calculate the contribution earned by each product
- Calculate the contribution of each product per minute
- How many units of product A, B and C should be produced to maximise the profits of the firm taking into account the limiting factor.
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