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Decision Making #1 The joint process makes Product can be sold immediately for 60 Liters of Y $8 per liter 40 Liters of Z or
Decision Making #1 The joint process makes Product can be sold immediately for 60 Liters of Y $8 per liter 40 Liters of Z or processed further into product B at an additional cost of Product Bcan then be sold for or processed further into product A at an additional cost of Product A can then be sold for Product Z can be sold immediately for $10 per liter $1 per liter $10 per liter $6 per liter $14 per liter Required: Determine if these 2 products Product Y and Product Z should be sold at split off or processed further. Explain your decision. Provide the total dollar generated in income for each product at split off and if processed further. Provide a recommendation based on your analysis to income. Solution: Product Y income generates at split off Recommendation: Product Y income if process further into B Product Zincome if process further into A Product Zincome generates at split off Recommendation: 300 labor hours per week to produce these 3 products Decision Making #2 ABC Company produces three products: A, B, and C. The company only has Product information is as follows: AB Unit selling price 14075 Unit variable costs 50 Unit contribution margin 40 25 240 180 60 Labor hours per unit Maximum demand in units per week 20 30 Required: What is the optimal product mixhow 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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