Problem:
The XYZ Corporation manufacturers both Product A and Product B.
Operating Information from the previous year is as follows:
| Product A: |
|
|
|
|
| Units produced and sold |
|
|
5000 |
| Machine hours used |
|
|
|
5000 |
| Sales price per unit |
|
|
|
$6 |
| Variable cost per unit |
|
|
|
$4 |
|
|
|
|
|
|
| Product B: |
|
|
|
|
| Units produced and sold |
|
|
3000 |
| Mavchine hours used |
|
|
|
2000 |
| Sales price per unit |
|
|
|
$9 |
| Variable cost per unit |
|
|
|
$8 |
|
|
|
|
|
|
| Contribution margin per machine hour (A) |
|
2 |
| Contribution margin per machine hour (B) |
|
1.5 |
|
|
|
|
|
|
| Machine hours constraint: |
|
|
|
| Machine hours per unit (A) |
|
|
|
| Machine hours per unit (B) |
|
|
|
| Max units produced & sold (A) |
|
|
|
| Max units produced & sold (B) |
|
|
|
| Max CM - 100% (A) |
|
|
|
|
| Max CM - 100% (B) |
|
|
|
|
|
|
|
|
|
|
| Units produced & sold (A) |
|
IF(f24>=f25,f22,0) |
| Units produced & sold (B) |
|
IF(f25>=f24,f23,0) |
Assuming that there is an unlimited demand for both products and XYZ has 12,000 machine hours available, how many units of each product should be produced and sold?