Jonathan Inc

question 123

Essay

Jonathan Inc.is analyzing its sales mix to find out if it is maximizing its profits.The company produces three similar items: Regular,Deluxe,and Luxury.All three of these products are made with the same equipment,but the machine hours available to make these products are limited.Product line statistics are as follows:
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:

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as materials and labor.

Profitable

Generating revenue that exceeds the expenses, costs, and taxes needed to sustain the activity.

Average Total Cost

The cost per unit of output, calculated by dividing the overall production costs by the number of units produced.

Profit-maximizing

A strategy or point where a business reaches the highest possible profit level with given operational limits and market conditions.