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Product Mix Decision, Single Constraint Behar Company makes three types of stainless steel frying pans. Each of the three types of pans requires the
Product Mix Decision, Single Constraint Behar Company makes three types of stainless steel frying pans. Each of the three types of pans requires the use of a special machine that has total operating capacity of 191,500 hours per year. Information on each of the three products is as follows: Selling price Unit variable cost Machine hours required Basic Standard Deluxe $11.60 $16.00 $33.68 $6.20 $9.96 $12.94 0.10 0.20 0.50 The marketing manager has determined that the company can sell all that it can produce of each of the three products. Required: 1. How many of each product should be sold to maximize the total contribution margin? If a product should not be produced at all, enter "0" for your answer. Number of basic units: Number of standard units: Number of deluxe units: What is the contribution margin per machine hour for each of these products? If required, round your answers to the nearest cent. Basic units: Standard units: Deluxe units: per machine hour per machine hour per machine hour What is the total contribution margin for this product mix? 2. Suppose that Behar can sell no more than 316,000 units of each type at the prices indicated. What product mix would you recommend? Number of basic units: Number of standard units: Number of deluxe units: What would be the total contribution margin?
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