Daisley Products Inc.makes two products-B17U and R94X.Product B17U's selling price is $110.00 and its unit variable cost is $66.00.Product R94X's selling price is $238.00 and its unit variable cost is $142.80.The monthly demand is 1, 290 units for product B17U and 490 units for R94X.The constrained resource is a particular machine that is available for 10, 300 minutes each month.Each unit of product B17U requires 5 minutes on this machine and each unit of product R94X requires 14 minutes on this machine. How many units of product R94X should be produced each month?
A)490
B)275
C)0
D)951

Question

Quizplus · Accepted Answer

To maximize profit, prioritize the product with the highest contribution margin per minute of machine time. Calculate the contribution margin per unit for each product (B17U: $44, R94X: $95.20) and then per minute (B17U: $8.80, R94X: $6.80). Produce as many B17U as possible (1,290 units, using 6,450 minutes), leaving 3,850 minutes for R94X, allowing for 275 units of R94X.