Question
Equote Inc. manufactures three products. The company has one large very expensive machine that all three products are produced on. The machine is available for
Equote Inc. manufactures three products. The company has one large very expensive machine that all three products are produced on. The machine is available for 76 hours per week. There are no other constraints to the manufacturing. The product information for the products are given below.
Product A | Product B | Product C | |
Selling price per unit | 397 | 752 | 604 |
Variable cost per unit | 250 | 550 | 500 |
Contribution margin per unit | 147 | 202 | 104 |
Hours of machine time | 3 | 2 | .5 |
Demand per week (units) | 500 | 300 | 100 |
1 - What is the contribution margin per unit of constrained resource for Product A? $
2 - What is the contribution margin per unit of constrained resource for Product B? $
3 - What is the contribution margin per unit of constrained resource for Product C? $
4 - In order to maximize contribution margin and profits, how many units of each product should the company produce?
Product A
Product B
Product C
5 - What is the maximum contribution margin the company can achieve per week given the current constraint $
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