Reference no: EM132515658

Allocating constrained resources - Umbrella Co. is considering the introduction of three new products. Per unit sales and cost information are as follows:

                                                          A                            B                       C

Sales price                                 $3.00                  $5.00            $16.00
Fixed costs                                   $1.20                  $3.40             $10.00
Labor hours per unit                       $0.50                   $1.00             $3.50
Monthly demand in units                  1 .2 hours              0.5 hours        5 hours
                                                       500                     600                   240

• The company has only 1,800 direct labor hours available to commit to production of any new products.

Required

Question 1: How many of each product should Umbrella Co. produce and sell to maximize its profit?