Question
MUFC Ltd makes two products, carpet polish and floor deodoriser. Operating information from the previous year is as follows: Carpet polish Floor deodoriser Sales price
MUFC Ltd makes two products, carpet polish and floor deodoriser. Operating information from the previous year is as follows:
Carpet polish Floor deodoriser
Sales price per unit $9.00 $13.00
Variable cost per unit $6.00 $10.00
Units produced and sold 5,000 4,000
Machine hours used 2,000 2,000
Fixed costs of $36,000 per year are at present allocated evenly between both products. If the product mix were to change, total fixed costs would remain the same. Assuming everything produced for either product can be sold, how many units of each product should be produced and sold if machine hours are limited to 10,000 hours?
Step by Step Solution
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Step: 1
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Step: 2
Step: 3
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