Test III PROBLEM SOLVING (CASE ANALYSIS) (2 points each) 20 points

A.

EGO Company produces three products, A, B, and C. A machine is used to produce the products. The contribution margin, sales demands, and time of the machine (in minutes) are as follows:

Demand CM Machine Time (minutes)

Product A 1,200 P 10 5

Product B 800 18 10

Product C 1,000 25 15

There are 400 hours available on the machine during the week.

REQUIRED: Compute for the following:

1. The contribution margin per minute of machine time for each product.
2. The optimal mix of products (number of units) for all the products
3. The contribution margin earned for the optimal mix as computed above.