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Q5. SALES MIX ABC Co. makes and sells three different products. The company has limited machine hours. The forecast costs and sales figures are as

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Q5. SALES MIX ABC Co. makes and sells three different products. The company has limited machine hours. The forecast costs and sales figures are as follows: Product Selling price per unit Maximum annual sales units Variable cost per unit Use of machine time per unit Fixed costs $25 40,000 $11 3 hours $11,000 B $35 40,000 $18 2.5 hours $5,000 C $42 30,000 $25 1.5 hours $3,000 Required: a) In which priority (i.e. optimum mix) should the company make these products? Explain why. b) What is the profit from the optimum mix if maximum annual sales in total are 80.000 units? c) What is the profit from the optimum mix if maximum machine hours in total are 205,000 hours

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