Respuesta :
Answer:
Product A, then Product C and finally Product B
Explanation:
The unit profit = Selling price per unit - Variable cost per unit - Fixed cost per unit
Unit Profit of product A = $21 - $11 - $5 = $5
Unit Profit of product B = $12 - $7 - $3 = $2
Unit Profit of product C = $32 - $18 - $9 = $5
The profit of each product in 1 machine hour = 1 hour/ Machine hours per unit * Unit Profit
Profit of Product A in 1 hour using machine = 1/0.2 * $5 = $25
Profit of Product B in 1 hour using machine = 1/0.5*$2 = $4
Profit of Product C in 1 hour using machine = 1/0.2* $5 = $25
Product A & Product C have same profit in 1 hour machine, then we have to consider Direct labor hours per unit which product A is 0.4 while product C is 0.7. It means Product C is more costly in direct labour than Product A.
In short, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is Product A, then Product C and finally Product B
Answer: The ranking of the product in terms the most profit to the least profit is A C B
Explanation:
A. B. C
$ $ $
Selling price per unit. 21 12 32
Less: Variable cost. 11 7 18
---------- ----------- ----------
Contribution margin. 10 5 14
Less: Fixed cost per unit. 5 3 9
-------- ---------- -----------
Profit. 5 2 5
--------- ------- --------
Since the machine hour is the constraint, we divide the profit by the machine hour per unit
Product A = 5÷0.2 = 25
Product B= 3 ÷ 0.5 = 4
Product C = 5 ÷ 0.2 = 25
Therefore the ranking in terms of most profitable to the least profitable is ACB
