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Crest Information Technologies manufactures 3 sizes of copiers: light usage, medium usage, and heavy usage. Potential sales include 200 units of light, 240 units of medium, and 200 units of heavy per month. The maximum machine hours available is 12,000 per month. Product information is provided below.
Light Medium Heavy Unit selling price $300 $500 $1,000 Unit Manufacturing costs: Variable (120) (240) (400) Fixed (80) (100) (240) Unit gross profit $100 $160 $360 Machine hours per unit 20 40 100
Variable selling and administrative expenses are $60 per unit for all products. Fixed manufacturing costs of $60,000 are assigned at the rate of $5 per machine hour.
How many of each product should be produced per month using the short-run strategy?
Light Medium Heavy a. 0 240 24 b. 200 0 80 c. 200 200 0 d. 200 40 80
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