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ABC Company produces three products: A, B, and C. The company only has 240 labor hours per week to produce these 3 products Product information
ABC Company produces three products: A, B, and C. | ||||||||||||||||
The company only has | 240 | labor hours per week to produce these 3 products | ||||||||||||||
Product information is as follows: | ||||||||||||||||
A | B | C | ||||||||||||||
Unit selling price | 160 | 100 | 210 | |||||||||||||
Unit variable costs | 100 | 50 | 180 | |||||||||||||
Unit contribution margin | 60 | 50 | 30 | |||||||||||||
Labor hours per unit | 6 | 4 | 6 | |||||||||||||
Maximum demand in units per week | 15 | 20 | 30 | |||||||||||||
Required: | ||||||||||||||||
What is the optimal product mix(how many X, Y, and Z should be produced) the company would produce for a week based on only having 240 labor hours and the demand for each product? Explain your answer and show computations. |
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