How many of each product should be produced


Crest Information Technologies manufactures three sizes of copiers: Light usage, Medium usage, Heavy usage. Potentail sales include 200 units of of Light, 240 units of medium and 200 units of heavy per month. The maximum machine hours available is 12,000 per month. Product information is provided below.

                                                   Light             Medium             Heavy

Unit selling price                         $300             $500                 $1,000

Unit Manaufacturing costs:

Variable                                       (120)            (240)                 (400)

Fixed                                            (80)              (100)                (240)

Unit gross profit                          $100              $160                  $360

Machine hour                                   20               40                     100

Variable selling and administrative expenses are $60 per unit for all products. Fixed manufacturing costs of $60,000 are assigned at the rate of $5 per machine hour. How many of each product should be produced per month using the short run strategy?

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Accounting Basics: How many of each product should be produced
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