Product Mix Decision

Essay

Product mix decision.The Gulf Shores Company has one machine on which it can produce either of two products,S or T.Sales demand for both products is such that the machine could operate at full capacity on either of the products,and Gulf Shores can sell all output at current prices.Product S requires one hour of machine time per unit of output and Product T requires two hours of machine time per unit of output.The following information summarizes the per-unit cash inflows and costs of Products S and T.

Selling costs are the same whether Gulf Shores produces Product S or T,or both;you may ignore them.
Required:
Should Gulf Shores Company plan to produce Product S,Product T,or some mixture of both? Why?
(Gulf Shores Company;product mix decision. )