The Wester Corporation produces three products with the following costs and selling prices: Product A B C Selling price per unit $ 21 $ 12 $ 32 Variable cost per unit $ 11 $ 7 $ 18 Fixed cost per unit $ 5 $ 3 $ 9 Direct labor hours per unit 0.4 0.1 0.7 Machine hours per unit 0.2 0.5 0.2 The company has insufficient capacity to fulfill all of the demand for these three products. If machine hours are the constraint, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:
The Wester Corporation produces three products with the following costs and selling prices: Product A B C Selling price per unit $ 21 $ 12 $ 32 Variable cost per unit $ 11 $ 7 $ 18 Fixed cost per unit $ 5 $ 3 $ 9 Direct labor hours per unit 0.4 0.1 0.7 Machine hours per unit 0.2 0.5 0.2 The company has insufficient capacity to fulfill all of the demand for these three products. If machine hours are the constraint, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Wester Corporation produces three products with the following costs and selling prices:
| Product | |||
|---|---|---|---|
| A | B | C | |
| Selling price per unit | $ 21 | $ 12 | $ 32 |
| Variable cost per unit | $ 11 | $ 7 | $ 18 |
| Fixed cost per unit | $ 5 | $ 3 | $ 9 |
| Direct labor hours per unit | 0.4 | 0.1 | 0.7 |
| Machine hours per unit | 0.2 | 0.5 | 0.2 |
The company has insufficient capacity to fulfill all of the demand for these three products.
If machine hours are the constraint, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:
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