Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
affa Limited produces three products—X, Y, & Z—with the following characteristics:
| X | Y | Z | ||||
| Selling price per unit | $20 | 100% | $16 | 100% | $20 | 100% |
| Variable cost per unit | 12 | 60% | 12 | 75% | 8 | 40% |
| Contribution margin per unit | $8 | 40% | $4 | 25% | $12 | 60% |
| Machine hours per unit | 5 | 3 | 4 |
The company has only a limited number of machine-hours available each month. If demand exceeds the company's capacity, in what sequence should orders be filled if the company wants to maximize its total contribution margin?
Multiple Choice
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Orders for Y first, X second, and Z third.
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Orders for X first, Z second, and Y third.
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Orders for Z first, X second, and Y third.
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Orders for Z first, Y second and X third
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Orders for Y only
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