Question
Umbrella Co. is considering the introduction of three new products. Per unit sales and cost information are as follows: (per unit) A B C Sales
Umbrella Co. is considering the introduction of three new products. Per unit sales and cost information are as follows:
| (per unit) | A | B | C |
| Sales price | $ 3.00 | $ 5.00 | $ 16.00 |
| Variable cost | $ 1.20 | $ 3.40 | $ 10.00 |
| Fixed cost | $ 0.50 | $ 1.00 | $ 3.50 |
| Labor hours per unit | 1.2 hr | 0.5 hr | 5hr |
| Monthly demand in units | 500 | 600 | 240 |
The company has only 1,800 direct labor hours available to commit to production of any new products.
How many of each product should Umbrella Co. produce and sell to maximize its profit?
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Introduction To Financial Accounting
Authors: CHARLES T. HORNGREN AND ET ALL.
11th Edition
9352862473, 978-9352862474
