Kareem Industry produces three types of products: X, Y and Z. There is unlimited demand for the products throughout Southern Ontario. The following information is provided: X Y ZUnit selling price$60 $40 $20Unit contribution margin$30 $20 $10Processing time required per unit1.25 hours 0.8 hours 0.5 hours Processing time is limited to 180 hours per month. What product mix should Kareem choose in order to maximize overall profit? Multiple Choice Produce 70 units of X, 70 units of Y and 70 units of Z Produce 144 units of X Produce 225 units of Y Produce 360 units of Z Produce 85 units of X and 40 units of Y

First we need to rank the products on the basis of contribution per hour.

Answered: Kareem Industry produces three types of…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter13: The Balanced Scorecard: Strategic-based Control

Section: Chapter Questions

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Kareem Industry produces three types of products: X, Y and Z. There is unlimited demand for the products throughout Southern Ontario. The following information is provided:

	X	Y	Z
Unit selling price	$60	$40	$20
Unit contribution margin	$30	$20	$10
Processing time required per unit	1.25 hours	0.8 hours	0.5 hours

Processing time is limited to 180 hours per month. What product mix should Kareem choose in order to maximize overall profit?

Multiple Choice

Produce 70 units of X, 70 units of Y and 70 units of Z
Produce 144 units of X
Produce 225 units of Y
Produce 360 units of Z
Produce 85 units of X and 40 units of Y

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