Question
Hammer Ltd. manufactures three different product lines: Model A, Model B and Model C. The following table contains per-unit data and annual demand for the
Hammer Ltd. manufactures three different product lines: Model A, Model B and Model C. The following table contains per-unit data and annual demand for the models: Model A Model B Model C Minimum demand 1,000 1,000 1,200 Maximum demand 4,000 5,000 6,000 Selling price $100 $85 $130 Direct materials 20 14 26 Direct labour ($12 per hour) 12 12 24 Variable support costs ($3 per machine-hour) 9 6 12 Fixed support costs 30 30 40 If there are 30,000 machine-hours available per year, how many units of each model should Hammer produce to maximize profits? a) 4,000 of A, 5,000 of B and 2,000 of C b) 1,333 of A, 1,000 of B and 6,000 of C c) 2,000 of A, 0 of B and 6,000 of C d) 0 of A, 3,000 of B and 6,000 of C
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started