Question
A company produces three products, and is currently facing a labor shortage; only 4,700 hours are available this month. The selling prices, costs, labor requirements,
A company produces three products, and is currently facing a labor shortage; only 4,700 hours are available this month. The selling prices, costs, labor requirements, and demand for the three products are as follows: Product A Product B Product C Sales price $ 68.00 $ 36.00 $ 51.00 Variable cost per unit $ 52.00 $ 21.00 $ 46.00 Direct labor hours per unit 2.0 3.2 1.6 Demand (units) 1,500 1,600 1,800 Required: In what order should the company prioritize production of the products? How many of each product should be produced during the labor shortage to maximize profit?
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