Suppose Limor Fried expands her business, Adafruit Industries, to make electric scooters.

Limor must decide on the best sales mix. Assume the company has a capacity of 400 hours of processing time available each month and it makes two types of scooters, Deluxe and Premium. Information on these products follows.

Required 1. Assume the markets for both types of scooters are unlimited. How many Deluxe scooters and how many Premium scooters should the company make each month? Explain. How much total contribution margin does this mix produce each month?
2. Assume the market for the Deluxe model is limited to 60 per month, with no market limit for the Premium model. How many Deluxe scooters and how many Premium scooters should the company make each month? Explain. How much total contribution margin does this mix produce each month?

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Deluxe Premium Selling price per unit Variable costs per unit. $70 $90 $40 $50 Processing minutes per unit 60 minutes 120 minutes