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What is the maximum amount wechsler would be willing to pay

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Question - Wechsler Company produces three products: A130, B324, and C587. All three products use the same direct material, Brac. Unit data for the three products are:

Selling price

Variable costs: Direct materials

Labour and other costs Quantity of Brac per unit

A130

£252

£72 £84 8 lb.

Product B324 £168

£45 £81 5 lb.

C587

£210

£27 £120 3 lb.

The demand for the products far exceeds the direct materials available to produce the products. Brac costs £9 per pound, and a maximum of 5,000 pounds is available each month. Wechsler must produce a minimum of 200 units of each product.

Required -

a. How many units of product A130, B324, and C587 should Wechsler produce?

b. What is the maximum amount Wechsler would be willing to pay for another 1,200 pounds of Brac?

Reference no: EM132941351

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