I am having difficulty answering this problem, can someone please explain to me how to solve each problem:
The Grand Company produces three products with the following costs and selling prices:
Product name large medium small
Selling price per unit $15 $20 $20
Variable Cost per unit $8 $10 $12
Machine Hours per unit 3.5 2 2.5
Grand has a limit of 20,000 machine hours available per month. The company has a monthly fixed cost of $50,000.
1. If there is virtually unlimited demand for each of the products, what is the maximum monthly profit?
2. If the demand for each of the products is 3000 units per month, what is the maximum monthly contribution margin that can be realized by the company?
The Grand Company produces three products with the following costs and selling prices:
Product name large medium small
Selling price per unit $15 $20 $20
Variable Cost per unit $8 $10 $12
Machine Hours per unit 3.5 2 2.5
Grand has a limit of 20,000 machine hours available per month. The company has a monthly fixed cost of $50,000.
1. If there is virtually unlimited demand for each of the products, what is the maximum monthly profit?
2. If the demand for each of the products is 3000 units per month, what is the maximum monthly contribution margin that can be realized by the company?
