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Pasadena Corp

question 38

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Pasadena Corp.produces three products,and currently has a shortage of machine hours since one of its two machines is down - only 360 hours are available this month.The selling price,costs,and labor requirements of the three products are as follows:
Pasadena Corp.produces three products,and currently has a shortage of machine hours since one of its two machines is down - only 360 hours are available this month.The selling price,costs,and labor requirements of the three products are as follows:    a.What is the contribution margin per unit for each product? b.What is the contribution margin per machine hour for each product? c.Assume Pasadena has unlimited demand for each product.Which product should Pasadena focus on producing? a.What is the contribution margin per unit for each product?
b.What is the contribution margin per machine hour for each product?
c.Assume Pasadena has unlimited demand for each product.Which product should Pasadena focus on producing?

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Definitions:

Open Account

A credit arrangement where goods or services are sold without immediate payment, allowing the buyer to pay at a later scheduled date.

EOQ Model

The Economic Order Quantity model is used to determine the optimal order size to minimize the sum of ordering, carrying, and stockout costs.

Reorder Points

The inventory level at which a new order should be placed to replenish stock before it runs out, avoiding stockouts and production delays.

Carrying Costs

The complete expense associated with keeping inventory, encompassing storage fees, insurance, and the cost of missed opportunities.

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