Solution-Determine the number of units that must be produced

Determine the number of units that must be produced

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Reference no: EM132565474

The three product lines of Grupo Company earn the following contribution margin per unit:

X = P10, Y = P15 and Z=P12

All of the three product require the use of Material A.

The needed quantities of Material A per unit of the product are 5, 3, 4 for product X, Y and Z. respectively.

A labor strike in the company manufacturing Material A limited the supply of the material to only 200,000 units per month, which is not enough to meet the monthly production requirements (based on sales demand) of 20,000 for x, 10,000 for Y and 30,000 for Z.

Fixed manufacturing costs for the three products amouns to P100,000 per month.

Question 1: Determine the number of units that must be produced for each product that will maximize total contribution margin and optimize utilization of the 200,000 units of Material A.

Reference no: EM132565474

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Determine the number of units that must be produced

Reference no: EM132565474

Reference no: EM132565474

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