Question
Hanson Corp. produces three products, and is currently facing a labor shortage only 5,000 hours are available this month. The selling price, costs, labor requirements,
Hanson Corp. produces three products, and is currently facing a labor shortage only 5,000 hours are available this month. The selling price, costs, labor requirements, and demand of the three products are as follows:
Product A | Product B | Product C | ||||
Selling price | $ | 68.00 | $ | 35.00 | $ | 52.00 |
Variable cost per unit | $ | 48.00 | $ | 21.00 | $ | 44.00 |
Direct labor hours per unit | 1.8 | 2.8 | 1.9 | |||
Demand | 1,100 | 1,900 | 2,100 | |||
|
a. In what order should Hanson prioritize production of the products?
A,B,C | |
C,B,A | |
B,A,C | |
C,A,B |
b. How many of each product should be sold during the labor shortage to maximize profit? (Leave no cells blank - be certain to enter "0" wherever required. Round your answer to the nearest whole number.) c. What is the total contribution margin if Hanson prioritizes production according to its limited resources? (Round your intermediate calculations to the nearest whole number and final answer to the nearest dollar amount.)
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