Rosie's Company has three products, P1, P2, and P3. The maximum Rosie's can sell is 82,000 units of P1, 75,000 units of P2, and 63,000 units of P3. Rosie's has limited production capacity of 60,000 hours. It can produce 12 units of P1, 6 units of P2, and 3 units of P3 per hour. Contribution margin per unit is $5.00 for the P1, $15.00 for the P2, and $25.00 for the P3. What is the most profitable sales mix for Rosie's Company?

Principles of Accounting Volume 2
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ISBN:9781947172609
Author:OpenStax
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Chapter10: Short-term Decision Making
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Rosie's Company has three products,
P1, P2, and P3. The maximum Rosie's
can sell is 82,000 units of P1, 75,000
units of P2, and 63,000 units of P3.
Rosie's has limited production capacity
of 60,000 hours. It can produce 12
units of P1, 6 units of P2, and 3 units of
P3 per hour. Contribution margin per
unit is $5.00 for the P1, $15.00 for the
P2, and $25.00 for the 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 82,000 units of P1, 75,000 units of P2, and 63,000 units of P3. Rosie's has limited production capacity of 60,000 hours. It can produce 12 units of P1, 6 units of P2, and 3 units of P3 per hour. Contribution margin per unit is $5.00 for the P1, $15.00 for the P2, and $25.00 for the P3. What is the most profitable sales mix for Rosie's Company?
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