XYZ Company produces three products, A, B, and C. XYZ's plant capacity is limited to 200,000 machine hours per year. The following information is available for planning purposes:
Product A Product B Product C
demand for next year ............. 100,000 units 200,000 units 150,000 units
selling price per unit ........... $18 $28 $23
variable costs per unit .......... $15 $20 $21
It is known that it takes 0.50 machine hours to produce one unit of Product A; 0.70 machine hours to produce one unit of Product B; and 0.40 machine hours to produce one unit of Product C.
Calculate the number of units of Product C that XYZ Company should produce in order to maximize its net income.