Question
Spring Company produces three products. Product X has a contribution margin of $60, requires 3 hours of machine time to produce, and has maximum sales
Spring Company produces three products. Product X has a contribution margin of $60, requires 3 hours of machine time to produce, and has maximum sales of 20,000 units. Product Y has a contribution margin of $90, requires 4 hours of machine time to produce, and has maximum sales of 16,000. Product Z has a contribution margin of $120, requires 7 hours of machine time to produce, and has maximum sales of 10,000 units. Spring Company has 180,000 hours of machine time available. Which of the following production plans is the best use of the available machine hours?
X 20,000 units, Y 16,000 units, Z 8,000 units.
X 15,334 units, Y 16,000 units, Z 10,000 units.
X 20,000 units, Y 12,500 units, Z 10,000 units.
None of the above.
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