billings company produces two products, product reno and product tahoe. each product goes through its own assembly and finishing departments. however, both of them must go through the painting department. the painting department has capacity of 2,460 hours per year. product reno has a unit contribution margin of $120 and requires 5 hours of painting department time. product tahoe has a unit contribution margin of $75 and requires 3 hours of painting department time. there are no other constraints. assume that only 500 units of each product can be sold. required: 1. what is the optimal mix of products?

Question

04-11-2022
Business

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billings company produces two products, product reno and product tahoe. each product goes through its own assembly and finishing departments. however, both of them must go through the painting department. the painting department has capacity of 2,460 hours per year. product reno has a unit contribution margin of $120 and requires 5 hours of painting department time. product tahoe has a unit contribution margin of $75 and requires 3 hours of painting department time. there are no other constraints. assume that only 500 units of each product can be sold. required: 1. what is the optimal mix of products?

Answer :

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tutorconsortium117 tutorconsortium117 · Answer 1 · 2022-11-08T00:56:16-05:00

An ideal combination increases the likelihood of unit deals while maintaining or, in a perfect world, improving the organization's profit. For instance, a blend that generates the highest sales for the following year could not position the company for future growth. see also: Product Mix

ideal combination

Reno = 615 dwellings

Tahoe has no apartments.

Explanation:

When a business is faced with a constraining factor, such as a scarce resource, it should allocate the scarce resource to the product that will contribute the most per unit.

Product Cont/unit Painting Hours/Unit Continuous Hours Ranking

Reno $120 4 30 Ist

Tahoe $78 3 26 2nd

The business should utilize all of its allotted 2,460 painting hours to create the following two products:

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