Reference no: EM132617388

Optimization of ScarceResource.The Kadita Company produces three products with the following costs and selling prices:

.........................................................................Product A..............Product B.................Product C

Selling price per unit ..................................P15..........................P20...............................P20

Variable cost per unit..................................P8............................P10...............................P12

Direct labor hours per unit..........................1...............................1.5.....................................2

Machine hours per unit..............................3.5..............................2....................................2.5

Problem 1: If Madison has a limit of 10,000 direct labor hours but no limit on machine hours, then the three products should be produced in the order:

Problem 2: What would be the total contribution margin if we follow the answer in number 9.

Problem 3: If Madison has a limit of 15,000 machine hours but no limit on direct labor hours, then the three products should be produced in the order:

Problem 4: What would be the total contribution margin if we follow the answer in number 11.