Red Rock Enterprises Is Analyzing Its Sales Mix to Find

question 42

Essay

Red Rock Enterprises is analyzing its sales mix to find out if it is maximizing its profits. The company produces three similar items: Alpha, Beta, and Gamma. 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:
$$\begin{array} { l l l l } & \text { Alpha } & \text { Beta } & \text { Gamma } \\\text { Curent production and sales (units) } & 105,000 & 158,000 & 95,000 \\\text { Machine haus per unit } & 10 & 5 & 13 \\\text { Selling price per unit } & \$ 63.00 & \$ 48.00 & \$ 84.00 \\\text { Unit variable cost } & \$ 33.00 & \$ 26.00 & \$ 49.00 \\\text { Unit varaable selling cost } & \$ 20.00 & \$ 16.00 & \$ 19.00\end{array}$$ 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:

Safe Needle Use

Practices that reduce health risks associated with needle usage, such as using new needles for injections and properly disposing of them.

AIDS Virus

The virus responsible for causing Acquired Immune Deficiency Syndrome (AIDS), known as HIV (Human Immunodeficiency Virus).

IV Drug Users

Individuals who inject drugs directly into their veins for recreational purposes, which significantly increases the risk of infection and disease transmission.

Highest Drug Use

Indicates the most intense or frequent consumption of controlled substances within a specific population or area.