Tanek Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in items of quality and features, all are good sellers. Tanek is currently operating at full capacity with limited machine time.

Sales and production information relevant to each model follows.

Product

Economy Standard Deluxe

Selling Price $30 $50 $100

Variable cost and expenses $16 $20 $46

Machine hours required 0.5 0.8 1.6

Instructions

(a) Ignoring the machine time constraint, which single product Tanek industries produce?

(b) What is the contribution margin per unit of limited resource for each product?

(c) If additional machine time could be obtained , how should the additional time be used