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XYZ Company produces three products, A, B, and C. XYZ's plant capacity is limited to 230,000 machine hours per year. The following information is available
XYZ Company produces three products, A, B, and C. XYZ's plant capacity is limited to 230,000 machine hours per year. The following information is available for planning purposes:
Product A | Product B | Product C | |
demand for that year | 100,000 units | 140,000 units | 10,000 units |
selling price per unit | 21 | 24 | 25 |
variable costs per unit | 16 | 17 | 21 |
It takes 0.70 machine hours to produce one unit of Product A; 0.80 machine hours to produce one unit of Product B; and 0.50 machine hours to produce one unit of Product C. Calculate the number of units of Product A that XYZ Company should produce in order to maximize its net income. Do not use decimals, the $ or type the word units after your answer.
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