Exercise 3.- Determine the optimal production mix and prepare the income statement with the following information: A company produces pillows of three types: Standard, Deluxe and Orthopedic. Orthopedic. Standard $280 $130 2.5 hrs. 1000 units Deluxe $490 $385 2 hrs. 800 units $650 $590 4 hrs. 400 units Unit sales price Unit variable cost Man hours per unit Demand Fixed costs $100,000 This month, there were problems with staff turnover and layoffs, so the workforce is only 5,000 hours.

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
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Exercise 3.- Determine the optimal production mix and prepare the income statement with the following information:
A company produces pillows of three types: Standard, Deluxe and Orthopedic.
Orthopedic.
Standard
$280
$130
2.5 hrs.
1000 units
Deluxe
$490
$385
2 hrs.
800 units
$650
$590
4 hrs.
400 units
Unit sales price
Unit variable cost
Man hours per unit
Demand
Fixed costs $100,000
This month, there were problems with staff turnover and layoffs, so the workforce is only 5,000 hours.
Transcribed Image Text:Exercise 3.- Determine the optimal production mix and prepare the income statement with the following information: A company produces pillows of three types: Standard, Deluxe and Orthopedic. Orthopedic. Standard $280 $130 2.5 hrs. 1000 units Deluxe $490 $385 2 hrs. 800 units $650 $590 4 hrs. 400 units Unit sales price Unit variable cost Man hours per unit Demand Fixed costs $100,000 This month, there were problems with staff turnover and layoffs, so the workforce is only 5,000 hours.
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