Question
Purple Company makes three products in a single facility. Data concerning these products follow: Products A B C Selling price per unit $62.50 $57.80 $75.25
Purple Company makes three products in a single facility. Data concerning these products follow:
Products A B C
Selling price per unit $62.50 $57.80 $75.25
Direct materials $12.10 $12.10 $7.50
Direct labour $18.25 $12.05 $9.12
Variable manufacturing overhead $2.60 $3.25 $1.80
Variable selling cost per unit $5.48 $4.58 $6.32
Mixing minutes per unit 7.25 8.75 3.50
Direct materials in KG per unit 5.18 4.05 7.02
Monthly demand in units 1,000 3,000 3,000
The mixing machines and direct materials used are potentially constraints in the production facility. A total of 25,000 minutes are available per month on these machines. Direct labour is a variable cost in this company. Total direct materials available are 40,000 kg.
Required: 1.) In what order should Purple Company produce its products if mixing minutes per unit are the only production constraint?
2.) In what order should Purple Company produce its products if direct materials used are the only production constraint?
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