Trevor Ltd manufactures and sells four products — A, B, C and D. The selling prices, variable costs, and number of machine hours required to produce each product are as follows.

Each of the four products is produced using a single machine. The machine has a maximum production capacity of 20 000 hours per year.
Required

(a) How many units of each of the four products can be produced in a year if the company produces only that product?

(b) Assuming that the company can sell all units produced, which product or mix of products should be produced?

(c) Assuming that the company must produce 2 000 units of Product B, what additional products should be produced?

Transcribed Image Text:

Product Selling price Variable costs Machine hours per unit ABCD $60 $34 4 80 42 85 58 70 42 325 5.5