Reference no: EM132603029
A. C. Tech Manufacturing Appliances manufactures three sizes of kitchen appliances: small, medium, and large. Product information is provided below.
Small Medium Large
Unit selling price $430 $550 $1,230
Unit costs:
Variable manufacturing (200) (320) (700)
Fixed manufacturing (50) (140) (240)
Fixed selling and administrative (90) (25) (130)
Unit profit $90 $65 $160
Demand in units 170 130 170
Machine-hours per unit 70 40 170
The maximum machine-hours available are 6,200 per week.
Question 1: How many of each product should be produced per month in order to maximize contribution margin?
Option 1: 170 Small, 170 Medium, 0 Large
Option 2: 0 Small; 130 Medium; 7 large
Option 3: 14 Small; 130 Medium; 0 Large
Option 4: 170 Small, 70 Medium, 40 Large