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Murphys, Inc. has the following production and cost data for two of its products, Standard and Deluxe: Standard Deluxe Contribution margin per unit $67.62 $37.30
Murphys, Inc. has the following production and cost data for two of its products, Standard and Deluxe:
Standard | Deluxe | |||
Contribution margin per unit | $67.62 | $37.30 | ||
Machine hours needed per unit | 2.10 | 1.00 |
A total of 80,000 hours is available each period for the production of the two products. The demand for both products is strong and Murphy will be able to sell as many of either product as it can produce. Ignoring qualitative issues, which of the two products should Murphy produce?
Standard | Deluxe | |||
Contribution margin per constraint | $ | $ |
Murphy should produce the product. |
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