Reference no: EM132603029

A. C. Tech Manufacturing Appliances manufactures three sizes of kitchen appliances: small, medium, and large. Product information is provided below.

                                                                 Small                  Medium                   Large

Unit selling price                                $430                  $550                  $1,230

Unit costs:

Variable manufacturing                          (200)                   (320)                  (700)

Fixed manufacturing                               (50)                   (140)                  (240)

Fixed selling and administrative                   (90)                  (25)                   (130)

Unit profit                                                $90                  $65                    $160

Demand in units                                       170                    130                      170

Machine-hours per unit                               70                     40                        170

The maximum machine-hours available are 6,200 per week.

Question 1: How many of each product should be produced per month in order to maximize contribution margin?

Option 1: 170 Small, 170 Medium, 0 Large

Option 2: 0 Small; 130 Medium; 7 large

Option 3: 14 Small; 130 Medium; 0 Large

Option 4: 170 Small, 70 Medium, 40 Large