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Bookmarks People Window Help / M Inbox (134)-gocraw20@gm C ezto.mheducation.com/hm.tpx 0 ×Bookshelf-eBookstore-MCKy D Hws-Chapter 7 ps Apple Netflix G Google w https://webauth D CHEMICAL D State Farm Fcu M Business Cordova manufactures three types of stained glass window, cleverly named Products A, B, and C. Information about these products follows: Sales price Variable costs per unit Fixed costs per unit Required number of labor hours $61.00 11.00 7.00 2.50 $91.00 25.00 7.00 4.00 $51.00 17.00 7.00 2.00 Cordova currently is limited to 60,000 labor hours per month. Cordova's marketing department has determined the following demand for its products: Product A Product B Product C 16,000 units 10,000 units 6,000 units Required: Given the company's limited resource and expected demand, compute how many units of each product Cordova should produce to maximize its profit. (Enter the products in the sequence of their preferences; the product with first preference should be entered first. Round your answer to the nearest whole number.) Units MacBook Air

Explanation / Answer

Calculate contribution margin per hour :

Product B used = (10000*2.50) = 25000 hour

Product A used = (16000*2) = 32000 hour

Product C used Balance 3000 hour and made = (3000/4) = 750 units

Product A Product B Product C Contribution margin per unit 34 50 66 Labour hour per unit 2 2.5 4 Contribution margin per labour hour 17 20 16.50 Rank 2 1 3

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