A Company Produces Three Different Products That All Require Processing

question 10

Essay

A company produces three different products that all require processing on the same machines.There are only 17,000 machine hours available in each year.Production information for each product is:
$\begin{array}{lrrr}&\text { A}&\text { B}&\text { C}\\\text { Sales price per unit } & \$ 22.00 & \$ 34.00 & \$ 46.00 \\\text { Variable costs per unit } & \$ 10.00 & \$ 19.00 & \$ 25.30 \\\text { Machine hours necessary to produce one unit } & .75 & 1.2 & 2.3\end{array}$
Required:
a.Determine the preferred sales mix if there are no market constraints on any of the products.
b.Determine the preferred sales mix if the demand is limited to 7,000 units for each product.
c.Determine the preferred sales mix if the demand is limited to 8,000 units for each product.

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Definitions:

Sacral

Relating to the sacrum, a large, triangular bone at the base of the spine that forms by the fusion of vertebral bones.

Coccygeal

Pertaining to the coccyx, the tailbone at the base of the vertebral column.

Radiation Therapy

A treatment for cancer and other diseases, using high-energy radiation to kill or damage cancer cells and shrink tumors.

Anemia

A deficiency of hemoglobin or red blood cells.