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Giant Inc Has 3,600 Machine Hours Available Each Month Required:
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Question 113

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Giant Inc. has 3,600 machine hours available each month. The following information on the company's three surgical kits is available:
Surgical Kit Surgical SurgicaL1Kit 2  Kit 3 Contribution margin per unit $5.00$4.00$2.50 Machine hours per unit 213 Sales demand in units 1.000800900\begin{array}{lrrr}&\text {Surgical Kit }&\text {Surgical }&\text {SurgicaL}\\&1&\text {Kit 2 }&\text { Kit 3}\\\text { Contribution margin per unit } & \$ 5.00& \$ 4.00 & \$ 2.50 \\\text { Machine hours per unit } & 2 & 1 & 3 \\\text { Sales demand in units } & 1.000& 800 & 900\end{array}
Required:
a. What production schedule will maximize the company's profits?
b. What will be the maximum possible contribution margin?

Correct Answer:

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a.CM/hr:Kit 1: $5/2 = $2.50; Kit 2: $4/1...

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