A manufacturing firm has discontinued production of a certain unprofitable product line. Considerable excess production capacity was created as a result. Management is considering devoting this excess capacity to one or more of three products: A, B, and C The number of machine hours required per unit are Machine Type Milling Machine Lathe Grinder At this moment the company has 713 hours available for the milling machines, 439 hours are available for the lathe, and 296 hours are available for the grinder Profit to be obtained per unit of each product is as follows, Unit Profits A B C ABC (625) (420) (202) 19 7 9 The salespeople estimate that they can sell all the units of A and B that can be made. But the sales potential of C is of 97 maximum. How many of each product should be made and what should the resultant maximum profit be? Production for A = Number Production for B = Number Production for C= Number Profit Number units units units 4

A manufacturing firm has discontinued production of a certain unprofitable product line. Considerable excess production capacity was created as a result. Management is considering devoting this excess capacity to one or more of three products: A, B, and C The number of machine hours required per unit are Machine Type Milling Machine Lathe Grinder At this moment the company has 713 hours available for the milling machines, 439 hours are available for the lathe, and 296 hours are available for the grinder Profit to be obtained per unit of each product is as follows, Unit Profits A B C ABC (625) (420) (202) 19 7 9 The salespeople estimate that they can sell all the units of A and B that can be made. But the sales potential of C is of 97 maximum. How many of each product should be made and what should the resultant maximum profit be? Production for A = Number Production for B = Number Production for C= Number Profit Number units units units 4

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 3CMA: Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each...

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