Question
Wayne, Inc. manufactures three sizes of kitchen appliances: small, medium, and large. Product information is provided below. small medium large unit selling price $300 $500
Wayne, Inc. manufactures three sizes of kitchen appliances: small, medium, and large. Product information is provided below.
small medium large
unit selling price $300 $500 $1000
unit costs (120) (240) (400)
variable manufacture
fixed manufacturing (80) (100) (240)
variable selling and administrative (60) (60) (60)
unit profit $40 $100 $300
demand in units 100 120 100
machine hours per unit 20 40 100
The maximum machine-hours available are 6,000 per week. Which of the three product models should be produced first if management incorporates a short-run profit maximizing strategy?
A.small chairs
B.medium chairs
C.large chairs
D.either medium or large chairs
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