Answer:
Profitable sales mix :
Deluxe - 180,000 units,
Classic - 58,500 units,
Basic- 365,000 units
Explanation:
<em>When a business is faced with a problem of shortage of a resource which can be used to produced more than one product type, to maximize the use of the resource , the business should allocate the scare resource for production purpose in such a way that it maximizes the contribution per unit of the scare resource.</em>
The labour hours required per unit of scarce resource=
Basic = 1/10 hr= 0.10
Classic =1/8 hr = 0.13
Deluxe= 1/4 hr = 0.25
Basic Classic Deluxe
Contribution per unit 15 25 55
Hour per unit <u>0.10</u> <u>0.13 </u> <u>0.25</u>
Contribution per hour 150 200 220
Product Unit Hours used
Deluxe 180,000 180000× 0.25 45,000
Classic 468,000 468,00× 0.13 58,500
Basic 365,000** 365,000×0.10 <u>36,500*</u>
Total hours <u> 140,000</u>
* = 140,000 - 45,000-58500= 36,500 hours
** = 36,500 hours/0.1 hour = 365,000 units
Units to be produced = 36,500/0.10= 365,000 units
Profitable sales mix :
Deluxe - 180,000 units,
Classic - 58,500 units,
Basic- 365,000 units