FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A manufacturing firm has discontinued production of a certain unprofitable product line. Considerable excess production capacity was created as a result.
Management is considering devoting this excess capacity to one or more of three products: A, B, and C.
The number of machine hours required per unit are
Machine Type
Milling Machine
Lathe
Grinder
At this moment the company has 713 hours available for the milling machines, 439 hours are available for the lathe, and 296 hours are available for the
grinder.
A B C
(625)
(420)
(202)
Profit to be obtained per unit of each product is as follows,
Unit Profits
A
B
C
19
7
9
The salespeople estimate that they can sell all the units of A and B that can be made. But the sales potential of C is of 97 maximum.
How many of each product should be made and what should the resultant maximum profit be?
Production for A = Number
Production for B = Number
Production for C = Number
Profit Number
units
units
units
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Transcribed Image Text:A manufacturing firm has discontinued production of a certain unprofitable product line. Considerable excess production capacity was created as a result. Management is considering devoting this excess capacity to one or more of three products: A, B, and C. The number of machine hours required per unit are Machine Type Milling Machine Lathe Grinder At this moment the company has 713 hours available for the milling machines, 439 hours are available for the lathe, and 296 hours are available for the grinder. A B C (625) (420) (202) Profit to be obtained per unit of each product is as follows, Unit Profits A B C 19 7 9 The salespeople estimate that they can sell all the units of A and B that can be made. But the sales potential of C is of 97 maximum. How many of each product should be made and what should the resultant maximum profit be? Production for A = Number Production for B = Number Production for C = Number Profit Number units units units
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