Question
Nike produces and sells three different products. There are only 640 machine hours available this month because one of the machines is down. Nike has
Nike produces and sells three different products. There are only 640 machine hours available this month because one of the machines is down. Nike has the following information regarding the production and sales of the three products:
Product A | Product B | Product C | ||||||
Selling price | $ | 12.00 | $ | 10.00 | $ | 12.00 | ||
Variable cost per unit | $ | 8.40 | $ | 6.00 | $ | 4.80 | ||
Machine hours per unit | 0.75 | 0.25 | 1 | |||||
Demand | 440 | 540 | 350 | |||||
a. In what order should Nike prioritize production of the products?
multiple choice
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A,B,C
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B,C,A
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C,B,A
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A,C,B
b. Given the shortage of machine hours, how many of each product should be produced and sold to maximize profit? (Round down your answers to the nearest whole number.)
c. If Nike prioritizes production according to the answer in requirement b, what would the total contribution margin be? (Round your final answer to the nearest whole number.)
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