XYZ Corp produces three products, and is currently facing a labor shortage – only 3,000 hours are available this month.

XYZ Corp produces three products, and is currently facing a labor shortage – only 3,000 hours are available this month. The selling price, costs, labor requirements, and demand of the three products are as follows:

PRODUCT ==================>ABCSelling Price$50.00$30.00$40.00Variable Cost Per Unit$35.00$10.00$30.00Direct Labor Hours Per Unit1.532Units Demanded10002000500

  1. In what order should XYZ Corp prioritize production of the products? List the letter of the product in the order of priority.  
  2. How many of each product should be produced (assuming all units will be sold during the period) during the labor shortage to maximize profit?
  3. What is the total contribution margin if XYZ Corp prioritizes production according to its limited resources? 

1A BC50303510152010 6.66666712 SPLess VCCM per unitCM per hourPriorityABC 40301053 2AB 1000 units500 units3 Total CM $ 25,000 1500 hours1500 hours3000 hours 1000*1.5…

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