Question
Pullman Cyclery manufactures four different types of bicycles: Mountain, Road, Hybrid, and Child. Information related to the production and sale of these products is found
- Pullman Cyclery manufactures four different types of bicycles: Mountain, Road, Hybrid, and Child. Information related to the production and sale of these products is found below (per unit):
| Mountain | Road | Hybrid | Child |
Selling Price | $175.00 | $140.00 | $200.00 | $125.00 |
Variable Costs | (100.00) | (70.00) | (120.00) | (71.00) |
Fixed Costs | (40.00) | (30.00) | (50.00) | (29.00) |
Income per Bicycle | $35.00 | $40.00 | $30.00 | $25.00 |
Pullman Cyclery has 89,400 Direct Labor Hours available each month and Direct Labor Hours represent the scarce resource for Pullman Cyclery. The usage of Direct Labor Hours for each type of bicycle can be found below:
| Mountain | Road | Hybrid | Child |
DL per unit | 2.40 | 2.00 | 2.50 | 1.80 |
Given expected demand, Buckeye estimates the following number of sales for each product per month:
| Mountain | Road | Hybrid | Child |
Max Sales | 15,000 | 9,000 | 12,000 | 6,000 |
Requirement:
Calculate the Product Mix for Pullman Cyclery based on its scarce resource.
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