Cordova manufactures three types of stained glass window, cleverly named Product
ID: 2555777 • Letter: C
Question
Cordova manufactures three types of stained glass window, cleverly named Products A, B, and C. Information about these products follows: Product A $52.00 17.60 8.00 2.00 Product B $62.00 10.75 8.00 2.50 Product C Sales price Variable costs per unit Fixed costs per unit Required number of labor hours S92.00 25.60 8.00 4.00 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 10,000 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.) Product Units ProducedExplanation / Answer
Contribution margin per labour hour :
Total labour hour available = 60000 labour hour
Product B = 10000*2.5 = 25000 hour
Product A = 10000*2 = 20000 hour
Balance hour = (60000-45000/4) = 3750 units
so unit produced :
Product A Product B Product C Sale price per unit 52 62 92 Variable cost per unit 17.60 10.75 25.60 Contribution margin per unit 34.40 51.25 66.40 Labour hour per unit 2 2.5 4 Contribution margin per labour hour 17.20 20.50 16.60