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Tanek Industries 30

Price: $1.99

Tanek Industries manufactures and sells three different models of wet-dry shop
vacuum cleaners. Although the shop vacs vary in terms of quality and features, all are
good sellers. Tanek is currently operating at full capacity with limited machine time.
Sales and production information relevant to each model follows.

  Economy Standard Deluxe
Selling price  $30 $50 $100
Variable costs and expenses  $14 $15 $46
Machine hours required  0.5 0.8 1.6

(a) Ignoring the machine time constraint, which single product should Tanek Industries
(b) What is the contribution margin per unit of limited resource for each product?
(c) If additional machine time could be obtained, how should the additional time be used?

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