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North York Statue Company makes miniature Mountie statues from cast iron. Sales total 40,000 units a year. the statues are finished either rough or polished, with an average demand of 60 percent rough and 40 percent for polished. Iron ingots, the direct material, costs $6 per kilogram. Processing costs are $200 to convert 20 kilograms into 40 statues. Rough statues are sold for $15 each and polished statues can be sold for $18 or engraved for an additional cost of $5. Polished statues can then be sold for $30.

Required:

Determine the product mix for statues that allows maximization of the company's operating margin.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M994329

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