Beautycare Corporation produces three kinds of skincare. Details of each type of skincare are as follows:

                                                                  Cleaning mil                   tonner                 moisturizer

Price per unit                                              $200                            $250                     $100

Unit variable cost                                      $150                             $100                      $60

Machine hours required                          0.50                              2.00                       0.20

Beautycare has 15,000 machine hours available for production

Required:

a.      If Beautycare can sell all of each type of skincare that it produces, determine the amount of type(s) of skincare that Beautycare should produce to maximize the profit. Show calculation

b.      Assume that the demand for each type of skincare is limited to 10,000 units each. Determine the amount of type(s) of skincare that Beautycare should produce to maximize the profit. Show calculation

c.      Assume that the demand for each type of skincare is limited to 10,000 units each. Determine Beautycare's contribution margin. Show calculation

d.      Related to your answer in (a), what other factors would you consider before making the decision to go ahead with that production plans

Answer rating: 100% (QA)

a To maximize profit Beautycare should produce only tonner Calculation Contribution margin per unit Price per unit Unit variable cost Contribution margin per unit of cleaning mil 50 Contribution margi... View the full answer