Question
Four products are manufactured by ABC: maxi midi mini micro Selling price per unit 600 400 300 250 variable labor cost per unit(40$/hour) 250 120
Four products are manufactured by ABC:
maxi midi mini micro
Selling price per unit 600 400 300 250
variable labor cost per unit(40$/hour) 250 120 140 90
variable material cost per unit 275 250 100 110
Each of the four products takes two production hours. Assuming production hours as the overall capacity constraint, the ranking order of products for ABC to maximize its profitability is:
a. maxi, midi, mini , micro
b. maxi, mini, micro, midi
c. micro, mini, maxi , midi
d. micro, midi, maxi, mini
Applying the theory of constrains and a throughput accounting approach, and assuming labor to be the bottleneck constraint, the ranking order of products for ABC to maximize its profitability within the labor constraint is:
a. maxi,midi,mini, micro
b. micro, mini, maxi, midi
c. maxi, mini, micro, midi
d. micro, midi, maxi, mini
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