Optimal Production Plan and Contribution Margin

[pcoin15]

HI brothers and sisters..anyway help will this question is appreciated...thank you

A company produces three different products which have the following details

Prod I Prod II Product III
Direct material 8 kg per unit 5 kg per unit 10 kg per unit
Contribution $35 per unit $25 per unit $48 per unit

Demand in units 3000 3000 2000
(excluding special contract)

The company must produce 1 000 units of Product I for a special contract before meeting normal demand. Unfortunately there are only 35 000 kg of material available.

<b>What is the optimal production plan (A, B, C or D) and why?</b>


Product I (units) Product II (units) Product III (units)
A 1 000 1 400 2 000
B 1 000 3 000 1 200
C 1 875 - 2 000
D 4 000 600 -

[tariqab]

pcoin15,

option B, where contribution margin is maximum 167,600 within constraints.

Regards
Tariq

[pcoin15]

Hello Tariq...thank you for your comments....

I agree it is b