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ABC Company produces three products: A, B, and C. The company only has 300 labor hours per week to produce these 3 products Product information
ABC Company produces three products: A, B, and C. | ||||||||||
The company only has | 300 | labor hours per week to produce these 3 products | ||||||||
Product information is as follows: | ||||||||||
A | B | C | ||||||||
Unit selling price | 140 | 75 | 240 | |||||||
Unit variable costs | 100 | 50 | 180 | |||||||
Unit contribution margin | 40 | 25 | 60 | |||||||
Labor hours per unit | 5 | 4 | 6 | |||||||
Maximum demand in units per week | 15 | 20 | 30 | |||||||
Required: | ||||||||||
What is the optimal product mix(how many A, B, and C should be produced) the company would produce for a week based on only having 300 labor hours and the demand for each product? | ||||||||||
Explain your answer and show computations. |
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