Problem-
The Spartan Manufacturing Company produces products A, B, and C. Although Spartan could sell up to 50 units of A, 60 units of B, and 50 units of C each week, a limitation of 400 machine-hours per week prevents Spartan from meeting these sales demands. The product information is as follows:
|
|
A
|
B
|
C
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|
Unit selling price
|
$240
|
$140
|
$160
|
|
Variable manufacturing costs:
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$164
|
$90
|
$102
|
|
Variable selling and admin. costs
|
$10
|
$10
|
$10
|
|
Machine-hours per unit
|
3
|
2
|
4
|
There is no fixed selling or administrative expenses. Fixed manufacturing costs are $3,000 per week.
a. In what order should Spartan allocate manufacturing hours to each product?
b. How many units of each product should be produced each week?
c. How much is Spartan's weekly profit or loss from implementing this schedule?
Additional information-
The problem belongs to Basic Accounting and it discusses about calculation of allocation of manufacturing hours, units of products to be produced every week and weekly loss or profit from implementing the schedule.