Reference no: EM132790779

Question - Dunder Mifflin makes three paper products, letter size paper, legal size paper, and glossy style paper, in a single facility. Data concerning these products follow:

Products Letter Size Legal Size Glossy

Selling price per unit $10 $11 $12

Variable expenses per unit $5.50 $7.25 $8.00

Direct labour mixing minutes per unit 2.5 2.25 3

Direct materials in KG per unit 9.5 7.5 6.8

Monthly demand in units 1,000 3,000 3,000

The mixing machines and direct materials used are potentially constraints in the production facility. A total of 5,000 minutes are available per month on these machines. Direct labour is a variable cost in this company. Total direct materials available are 10,000 kg.

Required -

1) In what order should Dunder Mifflin produce its products if direct labour mixing minutes per unit are the only production constraint?

2) In what order should Dunder Mifflin produce its products if direct materials used are the only production constraint?

3) If direct labour mixing minutes per unit are the only production constraint, how many units of each product should Dunder Mifflin produce to meet demand?