Abstract
After the financial crisis in 2008, the second-tier makers of the IC foundry industry were lack of the working capital. When the moment of the economic is rejuvenation, top managers hope to optimize the product mix based on the existing resources to increase the overall profit. This research will setup a product mix decision model for the managers arranging the production plan to reach the target of the maximum profit, an additional finding is the unit variable cost of the product is the key factor for the optimal product mix, but the literatures are less talking about the setting for the unit variable cost or the methods are too complicated, we hope this research can find an appropriate method to setup the unit variable cost.According to the various methods of product mix and the concepts of managerial accounting, this research summarize the advantages and disadvantages for the current methods of product mix, using an IC foundry company to be a case study, then proposed a modified product mix decision model, this model will consider the contribution margin and the effective use of the bottleneck, we call this model is the method of unit bottleneck contribution margin, we also find an appropriate method to setup the unit variable cost, combine this method to be a modified product mix decision model. The research has the following conclusions:(1) Unit bottleneck contribution margin is the most appropriate method for product mix decision modelThe optimal product mix should be considering the contribution margin and the effective use of the bottleneck, the higher unit bottleneck contribution margin will be the higher priority to production.(2) Least squares method is the cost-effective way to setup the product unit variable costThe contribution margin is equal to the unit price to minus the unit variable cost, we can collect the historical data of the manufacturing cost and the production volume, using least squares method to find out the unit variable cost, this method is cost-effective and the data is also reliable.