Question: A company produces three different products that all require processing on the same machines. There are only 27,000 machine hours available in each year. Production
A company produces three different products that all require processing on the same machines. There are only 27,000 machine hours available in each year. Production information for each product is:
|
| A | B | C |
| Sales price per unit | $20.00 | $38.00 | $35.00 |
| Variable costs per unit | $12.00 | $26.00 | $17.00 |
| Machine hours necessary to produce one unit | 2.5 | 4.0 | 4.50 |
1.
- Determine the preferred sales mix if there are no market constraints on any of the products.
- Determine the preferred sales mix if the demand is limited to 5,000 units for each product.
- Determine the preferred sales mix if the demand is limited to 3,000 units for each product.
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