Alamo Corporation processes all of its products through a lathe machine. The lathe is only available for 60 hours per week and is the constraint for all of the products. Data regarding Alamo Corporation's three products follows:
Product A | Product B | Product C | |
Selling price per unit | $75.00 | $60.00 | $90.00 |
Variable cost per unit | $45.00 | $35.00 | $80.00 |
Minutes of lathe time required per unit | 15 | 20 | 10 |
In what order should Alamo Corporation emphasize its products to maximize its contribution margin? (Rank the products in order from most profitable to least profitable.)
Product B, Product A, Product C |
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Product A, Product C, Product B |
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Product B, Product C, Product A |
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Product A, Product B, Product C |
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Product C, Product B, Product A |
For any clarification, please comment. Thank you.
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