Decision making #3-Use of Limited Resources-Singe Constraint Bush Manufacturing has the following labor hours available for producing M and N: 26,000 Total Direct labor hours available Consider the following information: M N Required Labor per unit in hours 3 2 Maximum demand in units 8,000 7,000 Contribution Margin per unit 9 8 Required: What is the optimal product mix(how many M and N should be produced)? Explain your answer and show computations.
Contribution margin per hour
| M | N | |
| Contribution margin per unit | 9 | 8 |
| Hour per unit | 3 | 2 |
| Contribution margin per hour | 3 | 4 |
| Rank | 2 | 1 |
Optimum product Mix
| Hour | Unit | |
| Product N | 7000*2 = 14000 | 7000 |
| Product M | 12000 | 12000/3 = 4000 |
| Total | 26000 |
Decision making #3-Use of Limited Resources-Singe Constraint Bush Manufacturing has the following labor hours available for...