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Delta, LTD makes three products (Alpha, Beta, and Gamma), all of which use a very rare ingredient called Omicron. Delta can purchase only 900 ounces
Delta, LTD makes three products (Alpha, Beta, and Gamma), all of which use a very rare ingredient called Omicron. Delta can purchase only 900 ounces of Omicron per month from its Greek source. Below is data for the three products:
Alpha | Beta | Gamma | |
Unit selling price | $82 | $70 | $100 |
Unit variable costs | 40 | 43 | 55 |
Unit contribution margin | 42 | 27 | 45 |
Omicron (ounces per unit) | 20 | 15 | 15 |
How should Delta allocate the 900 ounces of Omicron assuming it can sell unlimited quantities of all three produces?
Select one:
A. All 900 ounces should be allocated to Alpha
B. All 900 ounces should be allocated to Beta
C. All 900 ounces should be allocated to Gamma
D. None of the statements are correct
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