Question: Cat Company makes four products in a single facility. Data concerning these products appear below: Product A B C D Selling Price per Unit $35
Cat Company makes four products in a single facility. Data concerning these products appear below:
|
| Product |
|
|
|
|
| A | B | C | D |
| Selling Price per Unit | $35 | $30 | $20 | $26 |
| Variable Manufacturing Cost per Unit | $16 | $15 | $7 | $8 |
| Variable Selling Cost per Unit | $4 | $1 | $2 | $3 |
| Fixed Manufacturing Cost per Unit | $1.50 | $1.00 | $0.50 | $0.75 |
| Milling Machine Minutes per Unit | 4 | 1 | 2 | 3 |
| Monthly Demand in Units | 4,000 | 1,000 | 3,000 | 1,000 |
The milling machines are potentially a constraint in the production facility. A total of 10,000 minutes are available per month on these machines.
- In what order would you advise the company to produce the products? (Show all calculations)
- What product mix would you advise the company to make given demand? (Show all calculations)
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