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Determine sales mix with limited resources. P6.4A (LO 3), AN Tanek Industries manufactures and sells three different models of wet-dry shop vac- uum cleaners. Although
Determine sales mix with limited resources. P6.4A (LO 3), AN Tanek Industries manufactures and sells three different models of wet-dry shop vac- uum cleaners. Although the shop vacs vary in terms of quality and features, all are good sellers. Tanek is currently operating at full capacity with limited machine time. Sales and production information relevant to each model follows. Economy $30 Product Standard $50 Selling price Variable costs and expenses Machine hours required Deluxe $100 $46 1.6 $16 $20 0.5 0.8 Problems: Set A 6-45 Instructions a. Ignoring the machine time constraint, which single product should Tanek Industries produce? b. What is the contribution margin per unit of limited resource for each product? c. If additional machine time could be obtained, how should the additional time be used? b. Economy $28
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