Behar Company makes three types of stainless steel frying pans. Each of the three types of...
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Behar Company makes three types of stainless steel frying pans. Each of the three types of pans requires the use of a special machine that has total operating capacity of 170,250 hours per year. Information on each of the three products is as follows:
Basic Standard Deluxe Selling price $11.70 $16.58 $34.18 Unit variable cost $6.46 $10.76 $14.14 Machine hours required 0.10 0.20 0.50 The marketing manager has determined that the company can sell all that it can produce of each of the three products.
Required:
1. How many of each product should be sold to maximize the total contribution margin? If a product should not be produced at all, enter "0" for your answer.
Number of basic units: Number of standard units: Number of deluxe units: What is the contribution margin per machine hour for each of these products? If required, round your answers to the nearest cent.
Basic units: $ per machine hour Standard units: $ per machine hour Deluxe units: $ per machine hour What is the total contribution margin for this product mix?
$
2. Suppose that Behar can sell no more than 281,000 units of each type at the prices indicated. What product mix would you recommend?
Number of basic units: Number of standard units: Number of deluxe units: What would be the total contribution margin?
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