Question

Chapter 7 Assignment i Saved Cordova manufactures three types of stained glass window, cleverly named Products A, B, and C. Information about these products follows: 10 points Sales price Variable costs per unit Fixed costs per unit Required number of labor hours Product A $51.00 17.00 7.00 2.00 Product B $61.00 11.00 7.00 2.50 Product C $91.00 25.00 7.00 4.00 eBook Cordova currently is limited to 60,000 labor hours per month. Cordova's marketing department has determined the following demand for its products: ou Hint Product A Product B Product C 16,000 units 10,000 units 6,000 units Print References 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 answers to the nearest whole number.) Product Units Produced

Answer 1

Solution

Product	Units to be Produced
Product A	16,000
Product B	10,000
Product C	750

Working

No labor hours are left to produce Product C

Statement of ranking indicating which product to produced first, second and third
	Product
	Product A	Product B	Product C
Sales price per unit	$            51.00	$            61.00	$            91.00
Variable cost per unit	$            17.00	$            11.00	$            25.00
Contribution margin per unit	$            34.00	$            50.00	$            66.00
Labor hours per unit	2.00	2.50	4.00
Contribution margin per machine hour	$            17.00	$            20.00	$            16.50
Ranking	Second	First	Third

.

Statement of Optimum mix
Product	Units to be Produced	Machine hours per unit	Machine hours consumed
Product B	10,000	2.50	25000.00
Product A	16,000	2.00	32000.00
Product C	750	4.00	3000.00
Maximum Quantity			60000.00