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Rosie's Company has three products, P1, P2, and P3. The maximum Rosie' s can sell is 65, 300 units of P 1, 24,300 units of P2, and 12,300 units of P3. Rosie's has limited production capacity of 110, 100 machine hours. Machine hours per unit are as follows: P1, 1 hour; P2, 2 hours; P3, 4 hours. Contribution margin per unit is $5 for P1, $15 for P 2, and $25 for P3. What is the most profitable sales mix for Rosie's Company?

Rosie's Company has three products, P1, P2, and P3. The maximum Rosie' s can sell is 65, 300 units of P 1, 24,300 units of P2, and 12,300 units of P3. Rosie's has limited production capacity of 110, 100 machine hours. Machine hours per unit are as follows: P1, 1 hour; P2, 2 hours; P3, 4 hours. Contribution margin per unit is $5 for P1, $15 for P 2, and $25 for P3. What is the most profitable sales mix for Rosie's Company?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rosie's Company has three products, P1, P2, and P3. The maximum Rosie' s can sell is 65, 300 units of P 1, 24, 300 units of P2, and 12,300 units of P3. Rosie's has limited production capacity of 110, 100 machine hours. Machine hours per unit are as follows: P1, 1 hour; P2, 2 hours; P3, 4 hours. Contribution margin per unit is $5 for P1, $15 for P 2, and $25 for P3. What is the most profitable sales mix for Rosie's Company?
Transcribed Image Text:Rosie's Company has three products, P1, P2, and P3. The maximum Rosie' s can sell is 65, 300 units of P 1, 24, 300 units of P2, and 12,300 units of P3. Rosie's has limited production capacity of 110, 100 machine hours. Machine hours per unit are as follows: P1, 1 hour; P2, 2 hours; P3, 4 hours. Contribution margin per unit is $5 for P1, $15 for P 2, and $25 for P3. What is the most profitable sales mix for Rosie's Company?
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