The product-mix decision. XYZ Company produces Product A, Product B, and Product C. All three
products require processing on specialized finishing machines. The capacity of these machines is
1,800 hours per month. XYZ Company wishes to determine the product mix that should be achieved
to meet the high demand for each product and provide the maximum profit. Following is information
about each product:
Product A Product B Product C
Selling price..............$150 $120 $38
Variable costs............105 60 30
Machine time per unit..3 hours 2 hours 1 hour
Monthly demand (units) 450 300 750
Required:
Determine how the 1,800 hours of machine time should be allocated to the three products to provide
the most profitable product mix
