EXTRA CREDIT (Worth 5 pts):

10. Crane Company makes four products in a single facility. Data concerning these products appear below:

Product

A B C D

Selling price per unit $35.30 $30.20 $20.80 $26.00

Variable manuf. cost per unit $16.50 $15.80 $7.90 $8.50

Variable selling cost per unit $3.80 $1.60 $1.90 $3.30

Milling machine minutes per unit 3.30 1.70 2.10 2.50

Monthly demand in units 4,000 1,000 3,000 1,000

The milling machines are potentially the constraint in the production facility. A total of 22,600 minutes are available per month on these machines. Which product makes the MOST profitable use of the milling machines?

Determine the order of production and the amount of each product to be produced given the time available and the demand for each product.

What is the total contribution margin that can be earned given the order of production & demand?