Sand Canyon Enterprises Is Analyzing Its Sales Mix to Find

question 7

Essay

Sand Canyon Enterprises is analyzing its sales mix to find out if it is maximizing its profits. The company produces three similar items: X, Y, and Z. All three of these products are made with the same equipment, and maximum productive capacity measured in machine hours is now being used. Product line statistics are as follows:
$$\begin{array} { l l l l } & \mathbf { X } & Y & Z \\\text { Current production and sales (units) } & 105,000 & 158,000 & 95,000 \\\text { Machine hours per unit } & 10 & 5 & 13 \\\text { Selling price per urit } & \$ 63 & \$ 48 & \$ 84 \\\text { Unit variable cost } & \$ 33 & \$ 26 & \$ 49 \\\text { Unit variable selling cost } & \$ 17 & \$ 13 & \$ 16\end{array}$$ Determine whether the existing sales mix is the most profitable one possible. If your answer is no, offer your suggestion to improve the sales mix. Round answers to two decimal places.

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Definitions:

Average

A statistical measure representing the central or typical value in a set of data, calculated as the sum divided by the count of numbers.

American Women

Women who are citizens of, or live in, the United States of America.

Sample

A subset of a population selected for measurement, observation, or questioning, to provide statistical information about the population.

Total Population

The entire aggregation of items from which samples can be drawn for statistical measurement.