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What combination of pruning shears should handi-tool produce

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Reference no: EM132627305

Question 1: Handi-Tool Company manufactures and sells lawn garden tools. Handi manufactures three kinds of pruning shears: Snip-It, Deluxe Clipper, and Limb-Away. The demand for the pruning shears is highest in April. Expecting this trend to continue, Handi is interested in how to best utilize avaliable capacity. Given the following information, what combination of pruning shears should Handi-Tool produce?

                                        Snip-It                      Deluxe Clipper                     Limb-Away

Demand                      200,000                       100,000                          60,000

Unit Price                       $20                               $30                                 $50

Unit variable cost                $10                              $15                                $20

Unit contribution Margin           $10                              $15                        $30

Production rate (units per hour) 50                                 25                         15

Avaliable production hours 8000 hrs

Total fixed costs $400,000

Option a. 200,000 Snip-It; 100,000 Deluxe Clipper, 0 Limb-Away

Option b. 200,000 Snip-It; 60,000 Limb-Away; 0 Deluxe Clipper

Option c. 100,000 Deluxe Clipper; 60,000 Limb-Away; 0 Snip-It

Option d. 200,000 Snip-It; 100,000 Deluxe Clipper; 60,000 Limb Away

Option e. 150,000 Snip-It; 75,000 Deluxe Clipper; 45,000 Limb-Away

Reference no: EM132627305

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