A Company Produces Three Different Products That All Require Processing

question 100

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: $\begin{array}{lrrr}&A&B&C\\\text { Sales price per unit } & \$ 22.00 & \$ 34.00 & \$ 46.00 \\\text { Variable costs per unit } & \$ 10.00 & \$ 19.00 & \$ 25.30 \\\text { Machine hours necessary to produce one } & .75 & 1.2 & 2.3\\\text { unit }\end{array}$
Required:
(1) Determine the preferred sales mix if there are no market constraints on any of the products.
(2) Determine the preferred sales mix if the demand is limited to 7,000 units for each product.
(3) Determine the preferred sales mix if the demand is limited to 8,000 units for each product.

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Definitions:

Law of Contracts

A legal framework governing the creation, execution, and enforcement of agreements between parties.

Deeds

Legal documents that represent the ownership of, or an interest in, real property, and outline rights, obligations, and other conditions.

Land Conveyed

Refers to the process of transferring ownership of real estate from one party to another through a legal document such as a deed.

Estate Conveyed

The process of transferring property ownership, typically through a legal deed, from one party to another.