Exercise 16-18 The product mix decision LO 2, 3

ABC Company produces Product X, Product Y, and Product Z. All three products require processing on specialized finishing machines. The capacity of these machines is 2,190 hours per month. ABC Company wants to determine the product mix that should be achieved to meet the high demand for each product and provide the maximum profit. Following is information about each product:

	Product X			Product Y			Product Z
Selling price	$	151		$	119		$	37
Variable costs		103			58			31
Machine time per unit		3	hours		3	hours		1	hour
Monthly demand (units)		430			300			745

Required:

Determine how the 2,190 hours of machine time should be allocated to the three products to provide the most profitable product mix. (Do not round intermediate calculations.)