A company manufactures two products: Product A and Product B. The sales price per unit of...

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A company manufactures two products: Product A and Product B. The sales price per unit of Product A is $180 and the variable costs per unit of Product A is $90. The sales price per unit of Product B is $150 and the variable costs per unit of Product B is $50. The fixed costs total $300,000. The company can manufacture Product A every .25 machine hour and it takes .5 machine hours to make Product B. The company's production capacity is 1,250 machine hours per month. There is a limited sales demand for Product A of 2,500 units and a limited sales demand for Product B of 2,500 units. To maximize profits, what product and how many units should the company produce in a month? A company manufactures two products: Product A and Product B. The sales price per unit of Product A is $180 and the variable costs per unit of Product A is $90. The sales price per unit of Product B is $150 and the variable costs per unit of Product B is $50. The fixed costs total $300,000. The company can manufacture Product A every .25 machine hour and it takes .5 machine hours to make Product B. The company's production capacity is 1,250 machine hours per month. There is a limited sales demand for Product A of 2,500 units and a limited sales demand for Product B of 2,500 units. To maximize profits, what product and how many units should the company produce in a month?

Answer rating: 100% (QA)

Answer To maximize profits the company should produce a combination of Product A and Product B that maximizes the total contribution margin within the ... View the full answer