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Rainier Inc Required:
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Question 95

Essay

Rainier Inc. has 6,400 machine hours available each month. The following information on the company's three products is available:
 Product X  Product Y  Product Z  Contribution margin per unit $20.00$21.00$17.50 Machine hours per unit 232 Sales demand in units 1,0001,5001,500\begin{array} { l r r r } & \text { Product X } & \text { Product Y } & \text { Product Z } \\\text { Contribution margin per unit } & \$ 20.00 & \$ 21.00 & \$ 17.50 \\\text { Machine hours per unit } & 2 & 3 & 2 \\\text { Sales demand in units } & 1,000& 1,500 & 1,500\end{array}
Required:
a. What production schedule will maximize the company's profits?
b. What will be the maximum possible contribution margin?

Correct Answer:

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a.CM/hr for X: $20/2 = $10; Y: $21/3 = $...

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