Q1) ABC Company manufactures Product X, Product Y, and Product Z. All three products need processing on specialized finishing machines. Capacity of these machines is 3,600 hours per month. ABC Company wants to determine product mix that which be achieved to meet high demand for each product and give maximum profit.
Following is information about each product:
| |
Product X |
Product Y |
Product Z |
| Selling Price (a) |
$300 |
$240 |
$76 |
| Variable Costs (b) |
$210 |
$120 |
$60 |
| Machine Time Per Unit (Hours) (c ) |
6 |
4 |
2 |
| Monthly Demand (Units) (d) |
360 |
240 |
600 |
Find out how 3,600 hours of machine time must be allocated to three products to give the most profitable product mix.