Question
Lovebee Products Ltd specializes in bath, body, skin care and home care products that are made using premium, raw, organic ingredients. Lovebee Products has three
Lovebee Products Ltd specializes in bath, body, skin care and home care products that are made using premium, raw, organic ingredients. Lovebee Products has three products: hand creams, bath oils and lip balms. Unit data concerning each product is shown below. Product Hand cream Bath oil Lip balm Selling price $12.00 $18.00 $8.00 Direct labour costs 5.40 7.20 3.60 Other variable costs 2.70 6.90 1.20 Lovebee Products has 1,600 hours of labour available to build inventory in anticipation of the companys peak season. The operations manager wants to decide which product should be produced given that the direct labour hourly rate is $18. Instructions The operations manager wants to know which product to produce in order to maximize the companys income. Taking into consideration the constraints under which the company operates, show which product should be produced and sold, and what the total contribution margin for that product would be.
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