Garson inc produces three products data concerning the

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Reference no: EM13603522

Garson, Inc. produces three products. Data concerning the selling prices and unit costs of the three products appear below: Product F Product G Product H Selling price 50 80 70 Variable Costs 40 50 55 Fixed Cost 15 20 12 Milling Machine time(minutes) 4 2 5 Fixed costs are applied to the products on the basis of direct labor hours. Demand for the three products exceeds the company's productive capacity. The milling machine is the constraint, with only 2,400 minutes of milling machine time available this week.

Required:

a. Given the milling machine constraint, which product should be emphasized? Support your answer with appropriate calculations.

b. Assuming that there is still unfilled demand for the product that the company should emphasize in part (a) above, up to how much should the company be willing to pay for an additional hour of milling machine time?

Reference no: EM13603522

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