crane co. is considering the introduction of three new products. per unit sales and cost information are as follows: sales variable costs fixed costs labor hours per unit monthly demand in units a $ 3.00 $ 1.20 $0.50 0.75 hours 700 b $5.00 $3.40 $ 1.00 1.25 hours 650 $15.00 c $10.00 la $ 3.50 2.00 hours 250The company has only 1,800 direct labor hours available to commit to production of any new products. How many of each product should Crane Co. produce and sell to maximize its profit? (Round answers to 0 decimal places, e.g. 5,275.)

In a sales mix and given scarce or limited production resources, profit is maximized with the production and sale of units that make the highest contribution margin per the scarce resource.

Sales mix should rank products according to their contribution margin per scarce resource and produce accordingly.

Product A Product B Product C

Sales $3.00 $5.00 $15.00

Variable costs $1.20 $3.40 $10.00

Contribution margin/unit $1.80 $1.60 $5.00

Fixed costs $0.50 $1.00 $3.50

Labor hours per unit 0.75 hours 1.25 hours 2.00 hours

Contribution margin

per labor hour $2.40 $1.28 $2.50 ($5/2)

Monthly demand in units 700 650 250

Hours required 525 hrs 812.5 hrs 500

Total direct labor hours available = 1,800 hours

Total direct labor hours required to meet monthly demand = 1,837.50 hours

To maximize its profits:

Production Ranking Units Hours Required

Product C 250 500 (2 x 250)

Product A 700 525 (0.75 x 700)

Product B 620 775 (1.25 x 620)

Total 1,800 hours

Learn more about contribution margin per limited resources at https://brainly.com/question/15461091

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