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Ivanhoe Co. is considering the introduction of three new products. Per unit sales and cost information are as follows: A B C Sales $ 3.00
Ivanhoe Co. is considering the introduction of three new products. Per unit sales and cost information are as follows:
A | B | C | |||||||||||
Sales | $ | 3.00 | $ | 5.00 | $ | 18.00 | |||||||
Variable costs | $ | 1.20 | $ | 3.40 | $ | 12.00 | |||||||
Fixed costs | $ | 0.50 | $ | 1.00 | $ | 3.50 | |||||||
Labor hours per unit | 0.75 | hours | 1.25 | hours | 2.00 | hours | |||||||
Monthly demand in units | 800 | 650 | 250 |
The company has only 1,800 direct labor hours available to commit to production of any new products.
How many of each product should Ivanhoe Co. produce and sell to maximize its profit?
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