Biology Forums - Study Force

ABC Company produces three products, Standard, Deluxe and Superior, with the following characteristics:

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Standard

Deluxe

Superior

Selling price per unit	$10	$12	$14
Variable cost per unit	4	8	12
Contribution margin per unit	$  6	$  4	$  2
Machine hours per unit	2	4	1

The company has only 1,500 machine hours available each period. If demand exceeds the company's capacity, in what sequence should orders for the three products be filled to maximize the company's total contribution margin?

▸ Superior first, Standard second, Deluxe third

▸ Standard first, Deluxe second, Superior third

▸ Standard first, Superior second, Deluxe third

▸ Deluxe first, Standard second, Superior third

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