A company has limited machine hours available for production and must decide which of its four products to produce and in what order. How should the company order the products with the first product being the one produced first. For instance if Product A is first, then the company will produce as much of Product A as it can sell or produce with its machines, and then the company will move onto the next product.
Contribution Margins per Unit
Product A 3.50
Product B 2.50
Product C 4.00
Product D 3.75
Machine Hours per Unit
Product A 2.50
Product B 1.75
Product C 3.25
Product D 2.50