which means that employees work schedules are fixed regardless of the sales mix or p 592989
(Product Mix Decisions under Capacity Constraints) Magnificent Products makes three products: Macro, Mezzo, and Micro. The following information has been provided in relation to each product:
|
Macro |
Mezzo |
Micro |
|
|
Budgeted sales units |
10,000 |
7,500 |
5,000 |
|
Selling price per unit |
$12 |
$16 |
$18 |
|
Direct materials |
$ 3 |
$ 6 |
$ 1 |
|
Direct labour |
$ 3 |
$ 1 |
$ 3 |
|
Machine hours per unit |
3 |
3 |
5 |
- If the company has a limited production capacity, preventing all of its budgeted sales from being produced, how should Magnificent rank its products for manufacture in order to maximize profitability?
- If the production operation at Magnificent has a set production schedule for the next two months, which means that employees’ work schedules are fixed regardless of the sales mix or production volumes, how will this change your recommended product mix?