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How many units of Uptop will Lowez use to produce

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Problem - Downunder Company produces three products, Lough, Lowa, and Lowez. Lough sells for $40, Lowa for $80 and Lowez for $60.

Variable cost per product are:

Variable Cost

Lough

Lowa

Lowez

Direct Materials

$12

$20

$16

Direct Labour

$3

$15

$20

Other variable costs

$19

$25

$14

All three products use the same direct material, Uptop. The demand for the product far exceeds the direct material available to produce the products. Uptop costs $4 per unit and a maximum of 4,000 units are available each month. Downunder must produce a minimum of 250 of each product.

Required - How many units of Uptop will Lowez use to produce the required amount to maximum its operating margin?

Reference no: EM132840533

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