T&G Co. manufactures three types of computer desks. The income statement for the three products and the whole company is shown below:

		Product A		Product B		Product C			Total
Sales		$76,000		$104,000		$115,000			$295,000
Variable costs		41,000		69,000		105,000			215,000
Fixed costs		25,900		18,500		18,500			62,900
Total costs		66,900		87,500		123,500			277,900
Operating income (loss)		$9,100		$16,500		$(8,500	)		$17,100

The company produces 1,000 units of each product. The companys capacity is 17,000 machine hours. The machine hours for each product are 7 hours for Product A, 5 hours for Product B, and 5 hours for Product C. Fixed costs are allocated based on machine hours.

If the current production levels are maintained, should the company eliminate Product C? T&G Co. should notshould eliminate Product C.

If the company can sell unlimited quantities of any of the three products, which product should be produced? T&G Co. should produce Product BProduct AProduct C .

Suppose the company can sell unlimited quantities of any of the three products. If a customer wanted to purchase 570 units of Product C, what would the minimum sale price per unit be for this order?

Minimum sale price

$

per unit

The company has a contract that requires it to supply 570 units of each product to a customer. The total market demand for a single product is limited to 1,500 units. How many units of each product should the company manufacture to maximize its total contribution margin including the contract?

T&G Co. should manufacture
Product A			units
Product B			units
Product C			units