Reference no: EM133180216
Question - Ivanhoe Corporation produces three products, Standard, Deluxe and Superior, with the following characteristics:
|
|
Standard
|
Deluxe
|
Superior
|
|
Selling price per unit
|
$23
|
$25
|
$24
|
|
Variable cost per unit
|
17
|
20
|
21
|
|
Contribution margin per unit
|
$6
|
$5
|
$3
|
|
Machine hours per unit
|
2
|
2
|
2
|
The company has only 1840 machine hours available each period. If demand exceeds the company's capacity, in what sequence should orders for the three products be filled to maximize the company's total contribution margin?
a. Standard first, Superior second, Deluxe third
b. Standard first, Deluxe second, Superior third
c. Deluxe first, Standard second, Superior third
d. Superior first, Standard second, Deluxe third