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Wellington, Inc. manufactures three related products in its Colorado Springs facility.Relevant data are given below. The key material in these products is teflonium, a rare

Wellington, Inc. manufactures three related products in its Colorado Springs facility.Relevant data are given below. The key material in these products is teflonium, a rare mineral of which there is currently a shortage.In the near future, only 23,000 pounds per month of teflonium will be available, at a price of $180/lb.

Product AProduct BProduct C

Selling price/unit$1,200$1,450$1,950

Cost/unit:

Teflonium 360540720

Other materials 100120100

Direct labor 90120110

Variable overhead 202020

Fixed OH (300% of DL) 270360330

Expected monthly demand is:A, 8,000 units; B, 4,000 units; C, 1,000 units.

Required:How much of each product should Wellington produce each month

while the shortage lasts?Explain.

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