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 $80,000 $109,000 $120,000 $309,000

Variable costs 45,000 74,000 105,000 224,000

Fixed costs 22,400 16,000 16,000 54,400

Total costs 67,400 90,000 121,000 278,400

Operating income $12,600 $19,000 $(1,000) $30,600

The company produces 1,000 units of each product. The company's 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 not

should

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 B

Product A

Product C

?

Suppose the company can sell unlimited quantities of any of the three products. If a customer wanted to purchase 430 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 430 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 ?