A Company Manufactures Three Products

question 38

Essay

A company manufactures three products.Each unit of product X requires 10 machine hours,each unit of product Y requires 4 machine hours,and each unit of product Z requires 6 machine hours.The company's productive capacity is limited to 180,000 machine hours.Each unit of product X sells for $15 and has variable costs of $7.Each unit of product Y sells for $8 and has variable costs of $3.Each unit of Z sells for $12 and has variable costs of $4.
Required:
a.Calculate the contribution margin per hour of each of the products.
b.Determine the preferred sales mix if there are no market constraints on any of the products.
c.Determine the preferred sales mix if the demand is limited to 20,000 units of each.

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Definitions:

Attract Talent

The strategies and measures taken by organizations to entice highly skilled professionals to work for them.

Job Enrichment

A method to improve job satisfaction by adding tasks that increase the responsibility and opportunity for growth of the employee.

Horizontal Loading

The process of adding more tasks of similar complexity to an individual's job role to increase variety without necessarily increasing responsibility.

Job Characteristics Model

A framework that identifies how job design affects employee motivation, satisfaction, and performance based on five core dimensions.