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XYZ Company produces three products, A, B, and C. XYZ's plant capacity is limited to...

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Accounting

XYZ Company produces three products, A, B, and C. XYZ's plant capacity is limited to 48,000 machine hours per year. The following information is available for planning purposes: Product A Product B Product C demand for next year ............. 21,000 units 28,000 units 35,000 units selling price per unit ........... $80 $120 $160 direct material cost per unit .... $24 $ 22 $ 36 direct labor cost per unit ....... $18 $ 50 $ 62 variable overhead cost per unit .. $22 $ 25 $ 33 It takes 0.80 machine hours to produce one unit of Product A; 1.20 machine hours to produce one unit of Product B; and 1.60 machine hours to produce one unit of Product C. Assume that XYZ Company can work its plant overtime for 8,000 additional machine hours. Overtime premiums will add 50% to direct labor costs. Calculate the total number of units of Product C that XYZ Company should produce in order to maximize its net income.

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