Glover Company makes three products in a single facility. Data concerning the three products follow (per unit):

	Product
	A			B			C
Selling price	$	180	$		270	$		240
Variable expenses:
Direct materials		24			80			32
Other variable expenses		102			90			148
Total variable expenses	$	126	$		170	$		180

 

The company estimates that it can sell 500 units of each product per month.  The same raw material is used in each product.  The material cost is $8 per pound with a maximum of 6,000 pounds available each month. 

 Required:

1. How many pounds of raw materials would be required to satisfy demand for all three products?

 

2.  How many units of each product should be produced to maximize net operating income? 

 

3. Up to how much should the company be willing to pay for one additional pound of raw material if they could line up another supplier?

Answer rating: 100% (QA)

1 To calculate the total pounds of raw material required to satisfy demand for all three products we need to calculate the pounds of raw material required per unit for each product and multiply by the ... View the full answer