Determining Production with a Critical Resource Limitation Clarity Corporation produces three sizes of television sets: 10-inch screen, 19-inch screen, and 24-inch screen. The revenues and costs per unit for each size are as follows:

The company has a constraint on the amount of skilled labor available to produce television sets. Direct labor employees are paid $8 per hour. The total amount of labor time available for next week’s production is 2,700 hours.
Required:
Given the units ordered for next week, which size or sizes of television sets should be produced and sold to maximize the company’s profit?

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Screen Size 10-inch 19-inch 24-inch Selling price $195 $325 $450 Variable costs: Direct materials $ 55 $100 $126 Direct labor 80 120 180 Variable manufacturing overhead 40 60 Total variable costs $175 $280 90 $396 Contribution margin $ 20 $ 45 $ 54 Units ordered for next week 200 150 75