ABC Limited manufactures two products: Chip, Hhip and Skip. Information regarding the products is as follows:

CHIP HHIP SKIP

Revenue per unit $600 $620 $720

Direct Material and Labour cost per unit $240 $260 $340

Variable production overhead cost per unit $160 $100 $140

Total Market Demand 15,000 12,000 9000

Machine hour per unit                                 0.5 DLH       0.25 DLH        0.75DLH

There are 12,000 machine hours available during the quarter. Fixed costs are estimated at $6,240,000 per annum and are assumed to accrue evenly during the year.

Required:

a. Calculate the optimal product mix 

b. Calculate the optimal profit for the quarter.

c. Explain what is a limiting factor