Question: Product A requires 6 machine hours per unit to be produced, Product B requires only 3 machine hours per unit, and the company's productive capacity
Product A requires 6 machine hours per unit to be produced, Product B requires only 3 machine hours per unit, and the company's productive capacity is limited to 200,000 machine hours. Product A sells for $20 per unit and has variable costs of $10 per unit. Product B sells for $6 per unit and has variable costs of $1 per unit. Fixed costs are $200,000 regardless of which product is produced. Which of the following variables is not relevant to the decision of product mix?
Product A requires 6 machine hours per unit to be produced, Product B requires only 3 machine hours per unit, and the company's productive capacity is limited to 200,000 machine hours. Product A sells for $20 per unit and has variable costs of $10 per unit. Product B sells for $6 per unit and has variable costs of $1 per unit. Fixed costs are $200,000 regardless of which product is produced. Which of the following variables is not relevant to the decision of product mix?
Selling price of product A
Contribution margin for product B
Machine hours to produce product A
Fixed costs
Machine hours available
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