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Red Rock Enterprises is analyzing its sales mix to find out if its maximizing its profits. The company produces three similar items: Alpha, Beta, and
Red Rock Enterprises is analyzing its sales mix to find out if its maximizing its | |||||||
profits. The company produces three similar items: Alpha, Beta, and Gamma. All | |||||||
three products are made with the same equipment, and maximum productive | |||||||
capacity measured in machine hours is now being used. Product line statistics are | |||||||
as follows: | |||||||
Alpha | Beta | Gamma | |||||
Current production and sales (units) | 105,000 | 158,000 | 95,000 | ||||
Machine hours per unit | 10 | 50 | 13 | ||||
Selling Price per unit | $63 | $48 | $84 | ||||
Variable cost per unit | 33 | 26 | 49 | ||||
Other variable cost per unit | 20 | 16 | 19 | ||||
Which product line is the most profitable. |
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