Explore BrainMass
Share

Explore BrainMass

    sales mix with limited resources

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Manning Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features, all are good sellers. Manning is currently operating at full capacity with limited machine time.

    Sales and production information relevant to each model follows.

    Product
    Economy Standard Deluxe
    Selling price $30 $50 $100
    Variable costs and expenses $12 $18 $42
    Machine hours required .5 .8 1.6

    Hint:
    Determine sales mix with limited resources.

    Instructions
    (a) Ignoring the machine time constraint, which single product should Manning Industries produce?

    (b) What is the contribution margin per unit of limited resource for each product?

    (c) If additional machine time could be obtained, how should the additional time be used?

    © BrainMass Inc. brainmass.com October 10, 2019, 12:07 am ad1c9bdddf
    https://brainmass.com/economics/microeconomics/279660

    Solution Preview

    a)
    Economy Standard Delux
    Selling Price $30 $50 $100
    Variable cost $12 $18 $42
    Contribution Margin $18 $32 ...

    Solution Summary

    A sales mix with limited resources is assessed.

    $2.19