The company has only 1790 machine hours available each period. If demand exceeds the company's capacity, in what sequence should orders for the three products be filled to maximize the company's total contribution margin?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Sandhill Corporation produces three products, Standard, Deluxe and Superior, with the following characteristics:
Selling price per unit
Variable cost per unit
Contribution margin
per unit
Machine hours per unit
Standard Deluxe Superior
$18
9
$9
2
$20
12
$8
2
$19
O Superior first, Standard second, Deluxe third
O Standard first, Superior second, Deluxe third
O Deluxe first, Standard second, Superior third
O Standard first, Deluxe second, Superior third
18
$1
2
The company has only 1790 machine hours available each period. If demand exceeds the company's capacity, in what sequence should
orders for the three products be filled to maximize the company's total contribution margin?
Transcribed Image Text:Sandhill Corporation produces three products, Standard, Deluxe and Superior, with the following characteristics: Selling price per unit Variable cost per unit Contribution margin per unit Machine hours per unit Standard Deluxe Superior $18 9 $9 2 $20 12 $8 2 $19 O Superior first, Standard second, Deluxe third O Standard first, Superior second, Deluxe third O Deluxe first, Standard second, Superior third O Standard first, Deluxe second, Superior third 18 $1 2 The company has only 1790 machine hours available each period. If demand exceeds the company's capacity, in what sequence should orders for the three products be filled to maximize the company's total contribution margin?
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