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Question - Pharoah Co. is considering the introduction of three new products. Per unit sales and cost information are as follows:
A
B
C
Sales
$3.00
$6.00
$15.00
Variable costs
$1.20
$3.40
$10.00
Fixed costs
$0.50
$1.00
$3.50
Labor hours per unit
0.75 hours
1.25 hours
2.00 hours
Monthly demand in units
700
650
250
The company has only 1,700 direct labor hours available to commit to production of any new products.
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