Question
Harzog Industries produces three products, as shown below. A B C Sales price $75 $130 $30 Variable cost per unit 40 90 15 Contribution margin
Harzog Industries produces three products, as shown below.
|
| A | B | C |
| Sales price | $75 | $130 | $30 |
| Variable cost per unit | 40 | 90 | 15 |
| Contribution margin | $35 | $ 40 | $15 |
| Laminating hours per unit | 5 | 8 | 2 |
| Monthly demand (units) | 30,000 | 15,000 | 10,000 |
Because of a recent fire that destroyed a small section of the factory, Harzog has only 250,000 laminating hours available for the coming month's production schedule.
How many units of each product should be produced to maximize contribution margin (for A,B, and 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
Auditing And Assurance Services
Authors: Timothy J Louwers, Robert J. Ramsay, David Sinason, Jerry R Strawser
1st Edition
0072954442, 9780072954449
