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Balloon, Inc. produces three types of balloonssmall, medium, and largewith the following characteristics:

Balloon, Inc. produces three types of balloons—small, medium, and large—with the following characteristics:




Small

Medium

Large

Selling price per unit

$5

$8

$10

Variable cost per unit

3

5

6

Contribution margin per unit

$2

$3

$4

Machine hours per unit

1

2.4

3

Demand in units

500

1,000

800


The company has only 2,000 machine hours available each month.

How many units of each type of balloon should the company make to maximize its total contribution margin?

Top Answer

The company will produce 500 units of small balloons and 500... View the full answer

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