Bo Company sells two products, Product A and Product M, for a per unit price of

Question

Bo Company sells two products, Product A and Product M, for a per unit price of $10 and $12, respectively, and with variable costs of $2 and $8, respectively. Annual fixed costs required for the two products total $90,000. For each product, the variable costs include $1 per unit for a raw material that will not be available during 2000. Bo has a limited amount of the raw material on hand and more orders for either product A or M than can be produced. Bo’s managers ask you how to best use the scarce raw material.



Prepare a schedule to help Bo’s manager’s make their decision and interpret the terms used in the schedule.

Explanation / Answer

Sorry its Product A

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