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 194,200 hours per year. Information on each of the three products is as follows:

	Basic	Standard	Deluxe
Selling price	$12.40	$17.38	$34.24
Unit variable cost	$7.06	$11.16	$14.14
Machine hours required	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:	fill in the blank 1
Number of standard units:	fill in the blank 2
Number of deluxe units:	fill in the blank 3

What is the contribution margin per machine hour for each of these products? If required, round your answers to the nearest cent.

Basic units:	$fill in the blank 4 per machine hour
Standard units:	$fill in the blank 5 per machine hour
Deluxe units:	$fill in the blank 6 per machine hour

What is the total contribution margin for this product mix?

$fill in the blank 7

2. Suppose that Behar can sell no more than 319,000 units of each type at the prices indicated. What product mix would you recommend?

Number of basic units:	fill in the blank 8
Number of standard units:	fill in the blank 9
Number of deluxe units:	fill in the blank 10

What would be the total contribution margin?

$fill in the blank 11