Respuesta :
Answer:
Total products produced by B = 3847
Explanation:
Given - Dustin Co. makes three products, A, B and C. They have a constrained resource - machine hours. There are only 17,398 machine hours available a month.
The three products have the following data:
A B C
Selling Price per unit 6.00 16.00 11.00
Variable Cost per unit 2.00 4.00 6.00
Machine hours required 2 4 5
Demand for product in units 1,009 3,847 1,037
To find - How much of product B should be produced?
Solution -
Products A B C
Selling Price per unit 6 16 11
Variable cost per unit 2 4 6
Contribution (Selling - Variable) 4 12 5
Machine hours required 2 4 5
Contribution per hr 2 3 1
(Conribution / Machine hour)
Rank II I III
Demand 1009 3847 1037
Now,
Hours allocated to B -
No. of hours available = 3847 × 4 = 15,388
Available hours = 17,398
Now,
Extra hours = 17,398 - 15,388 = 2,010 (Allocated to A)
∴ The production of product B should be full capacity
i.e. Total products produced by B = 3847
The contribution margin is the amount of revenue left by the business after deducting all the variable costs from the selling price. The contribution margin includes the fixed costs. For decision making those products are chosen for selling those are having a higher contribution margin.
Find the attachment for the contribution margin of the products.
Now, Number of hours available = [tex]3847 \times 4 &= 15, 388[/tex]
Available hours = [tex]17,398[/tex]
Also, the extra hours are = [tex]17, 398 - 15, 388&=2010[/tex] (Allotted to A).
Thus, product B should produce with full capacity, which is B = 3847.
To know more about contribution margin, refer to the following link:
https://brainly.com/question/14902120
