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ABC Company produces Product X, Product Y, and Product Z. All three products require processing on...

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Accounting

ABC Company produces Product X, Product Y, and Product Z. Allthree products require processing on specialized finishingmachines. The capacity of these machines is 2,130 hours per month.ABC Company wants to determine the product mix that should beachieved to meet the high demand for each product and provide themaximum profit. Following is information about each product:Product X Product Y Product Z Selling price $ 149 $ 121 $ 35Variable costs 104 60 27 Machine time per unit 3 hours 3 hours 1hour Monthly demand (units) 430 280 755

Determine how the 2,130 hours of machine time should beallocated to the three products to provide the most profitableproduct mix. (Do not round intermediatecalculations.)

Answer & Explanation Solved by verified expert
4.0 Ratings (591 Votes)
Product X Product Y Product Z Selling price i 149 121 35 Variable cost ii 104 60 27 Contribution margin per unit iii i ii 45 61 8 Machine time per unit iv 3 hours 3 hours 1 hour    See Answer
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