Question
Story Corp. produces three products, and currently has a shortage of machine hours since one of its two machines is down - only 460 hours
Story Corp. produces three products, and currently has a shortage of machine hours since one of its two machines is down - only 460 hours are available this month. The selling price, costs, labor requirements, and demand of the three products are as follows:
Product A | Product B | Product C | ||||||
Selling price | $ | 5.00 | $ | 3.00 | $ | 5.00 | ||
Variable cost per unit | $ | 2.50 | $ | 1.00 | $ | 4.50 | ||
Machine hours per unit | 1 | 1.25 | 0.25 | |||||
Demand | 300 | 400 | 210 | |||||
a. In what order should Story prioritize production of the products?
multiple choice
A,B,C
B,C,A
C,A,B
b.)How many of each product should be sold while the machine is down to maximize profit? (Round your answer to the nearest whole number.)
c. What is the total contribution margin if Story prioritizes production according to its limited resources? (Do not round contribution margin. Round number of products to the nearest number.)
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