Question

Bricktan Inc. makes three products, basic, classic, and deluxe. The maximum Bricktan can sell is 728,000 units of basic, 524,000 units of classic, and 250,000 units of deluxe. Bricktan has a limited production capacity of 142,000 hours. It can produce 10 units of basic, 8 units of classic, and 4 units of deluxe per hour. Contribution margin per unit is $15 for the basic, $25 for the classic, and $55 for the deluxe. What is the most profitable sales mix for Bricktan Inc.?

a) 72,800 basic, 524,000 classic and 500,000 deluxe.
b) 280,000 basic, 250,000 classic and 500,000 deluxe.
c) 274,000 basic, 500,000 classic and 250,000 deluxe.
d) 1,120,000 basic, 0 classic and 250,000 deluxe.
e) 140,000 basic, 524,000 classic and 250,000 deluxe.

Answer 1

For most profitable sales mix Basic Classic Deluxe

Units produced for

most profitable sales mix 72,800 524,000 250,000

Step-by-step explanation:

The computation is shown below;

Particulars Basic Classic Deluxe

Contribution margin per unit $15 $25 $55

Production units per hour 10 8 4

Contribution margin per

production hour $150 $200 $220

Order III II I

Particulars Basic Classic Deluxe Total

Maximum number of units

to be sold 728,000 524,000 250,000 1,502,000

Hours needed to generate

the maximum units 72,800 65,500 62,500 200,800

For most profitable sales mix Basic Classic Deluxe Total

Hours dedicated

to the production

of each product 7,280 65,500 62,500 135,280

(728,000 × 1 ÷ 10) (524,000 × 1 ÷ 8) (250,000 × 1 ÷ 4)

Units produced for

most profitable sales mix 72,800 524,000 250,000

This is the correct answer but the same is not provided in the given options