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# What is the answer Marshall, Inc., produces three products…

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What is the answer Marshall, Inc., produces three products but weekly demand for the three products exceed the available amount of machine time. Following is information about each product:
Product A Product B Product C
Contribution margin per unit \$300 \$400 \$150
Machine hours per unit ; 3 2 0.50
Weekly demand (units) 100 300 800Determine how many units each of Product A, Product B, and Product C that Marshall, Inc., should produce each week assuming 1,000 hours of available machine time.

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Submitted: 4 months ago.Category: Business and Finance Homework
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12/9/2017
Business Tutor: Carter McBride, CPA replied 4 months ago
Satisfied Customers: 1,038
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Product A =\$450/1.5 =\$300

Product B =\$500/2=\$250

Product C =\$250/1.25=\$200

Product A has the greatest CM per hour

Product A-320 (weekly demand) x 1.5 hrs (machine hours per unit) =480 hrs of machine time needed to produce at this level demand

Product B-300(weekly demand) x 2hrs (machine hours per unit) =600 hrs

Product C - 500 (weekly demand) x 1.25hrs (machine hours per unit) = 625 hrs

Total Machine Hours available 1,000

Highest Product CM/per machine hour -480 (Product A)

Machine hours available to use 520

Next highest product - 520 (Product B)

Allocate 480 hours to Product A, then the rest to Product B even though the demand will not be met for product B since it has the next highest contribution margin per machine hour.

Hope that helps. Please leave a rating. Thanks!

Customer reply replied 4 months ago
the number are different in answer than the qustion
Product A =\$450/1.5 =\$300Product B =\$500/2=\$250Product C =\$250/1.25=\$200
Customer reply replied 4 months ago
are you sure that this answer of the question that I post??? is it 100% correct??
Business Tutor: Carter McBride, CPA replied 4 months ago

Product A =\$300/3 =\$100

Product B =\$400/2=\$200

Product C =\$150/.5=\$300

Product C has the greatest CM per hour.

Product A: 100 * 3= 300 hours of machine time

Product B: 300 * 2 = 600 hours of machine time

Product C: 800 * .5 = 400 hours of machine time.

Total Hours Available - 1,000

Highest Product CM/machine hour - 400 (Product C)

Machine hours left - 600

Next Highest CM - 600 hours Product B.

So, you would produce 600 hours of Product C and 400 hours of Product B.

Business Tutor: Carter McBride, CPA replied 4 months ago

Hey! I just wanted to follow up and see if you had any other questions. If not, please leave a review. Thanks!

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