Question
Power Scru, LLC produce three different Models of power washer. A Limitation of 2000 machine hours associated with equipment necessary for making a key component
Power Scru, LLC produce three different Models of power washer. A Limitation of 2000 machine hours associated with equipment necessary for making a key component of all three models of the power washers prevents Power Scrub from meeting the sales demand for all of its power washers. The Three are Economy Electric, Big Job Electric and a Commercial Gasoline Model
The Following information pertains to tower Scrubs three models of power washers
| Economy | Big Job | Commercial |
Units Selling Price | $140 | $220 | $400 |
Units Variable Costs | $96 | $140 | $260 |
Machine hours per Unit | 0.2 | 0.4 | 0.5 |
Maximum annual Demand | 2000 Units | 5000 Units |
1. What is the Recommended Product Mix to Maximize profit in the Short Run ?
2. What is the total contribution Margin at the Product Mix your recommended ?
3. What strategic/Qualitative Factors should power scrub Consider in reaching their Decision ?
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