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Calculate the number of units of product

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Question - XYZ Company produces three products, A, B, and C. XYZ's plant capacity is limited to 230,000 machine hours per year. The Following information is available for planning purposes:

 

Product A

Product B

Product C

demand for next year

100,000 units

140,000 units

180,000 units

selling price per unit

$21

$24

$25

variable costs per unit

$16

$17

$21

It takes 0.70 machine hours to produce one unit of Product A; 0.80 machine hours to produce one unit of Product B; and 0.50 machine hours to produce one unit of Product C.

Calculate the number of units of Product A that XYZ Company should produce in order to maximize its net income.

Reference no: EM132226027

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