Simon Corporation manufactures and sells three different models of storm doors. Although the doors vary in terms of quality and features, all are good sellers. Simon is currently operating at full capacity with limited machine time.

Sales and production information relevant to each model is as follows:

Instructions
Answer the following questions:
(a) Ignoring the machine time constraint, which single product should Simon produce?
(b) What is the contribution margin per unit of limited resource for each product?
(c) If it could obtain additional machine time, how should the company use the additional time?

Transcribed Image Text:

Product Selling price Variable costs and expenses Machine hours required Economy $180 s 99 0.6 $250 $150 0.9 Deluxe $430 $280 1.2