Bell Company Produces and Sells Three Products (A, B, C)

question 89

Essay

Bell Company produces and sells three products (A, B, C).The following data relate to the three products.Management considers labor to be a fixed cost. $\begin{array}{lrrr}&A&B&C\\\text { Demand in units } & 120 & 110 & 100 \\\text { Selling price per unit } & \$ 100 & \$ 120 & \$ 105 \\\text { Raw material cost/unit } & \$ 50 & \$ 60 & \$ 60 \\\text { Labor time in minutes/unit } & 12 & 17 & 7\end{array}$ Required:
1.Calculate the contribution per labor minute for each product.
2.Determine the best product mix.Assume there are five employees, and given time for breaks, training, and regular meetings, there are a total of 2,200 minutes available per day.

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