T&G Co. manufactures three typ

T&G Co. manufactures three types of computer desks. Theincome statement for the three products and the whole company isshown below:

Product A Product B Product C Total
Sales $76,000 $104,000 $115,000 $295,000
Variable costs 41,000 69,000 105,000 215,000
Fixed costs 25,900 18,500 18,500 62,900
Total costs 66,900 87,500 123,500 277,900
Operating income (loss) $9,100 $16,500 $(8,500 ) $17,100

The company produces 1,000 units of each product. The company’scapacity is 17,000 machine hours. The machine hours for eachproduct are 7 hours for Product A, 5 hours for Product B, and 5hours for Product C. Fixed costs are allocated based on machinehours.

1. The company has a contract that requires it to supply 570units of each product to a customer. The total market demand for asingle product is limited to 1,500 units. How many units of eachproduct should the company manufacture to maximize its totalcontribution margin including the contract?

T&G Co. shouldmanufacture
Product A units
Product B units
Product C units


Contribution margin = Sales – Variable cost

Contribution margin per limiting factor = Contribution margin/Limiting factor per unit

Product A

Contribution margin = 76,000 – 41,000 = $35,000

Contribution margin per limiting factor

= 35,000/7

= $5,000

Product B

Contribution margin = 104,000 – 69,000 = $35,000

Contribution margin per limiting factor


= $7,000

Product C

Contribution margin = 115,000 – 105,000 = $10,000

Contribution margin per limiting factor

= 10,000/5

= $2,000

Therefore as the contribution margin per limiting factor ishighest of product B therefore maximum of Product B is to beproduced . However 570 units each of product A and C is to producedfirst. And as the total demand for product is 1,500 units thereforesecond best product is product A as contribution margin perlimiting factor is higher than C

Units of B = 1500 units

Hours used = 1500*5 = 7,500

Units of C = 570 units

Hours used = 570*5 = 2,850

Hours left = 17,000 – 7,500 – 2,850 = 6,650

Units of A = 6,650/7 = 950 units

Therefore total units are as follows

Product A = 950 units

Product B = 1,500 units

Product C = 570 units

If you find the answer helpful please upvote.

"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"
Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with brilliantassignmenthelp.com
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes