Talbot Industries manufactures two models of wireless headset: TI-12 and TI-28. Each model requires time on a single machine. The machine has a monthly capacity of 540 hours. Total market demand for the two models is limited to 2,000 units of TI-12 and 1,000 units of TI-28 monthly. Talbot is currently producing and selling 1,500 TI-12 models and 780 TI-28 models each month. Cost and machine-usage data for the two models are shown in the following spreadsheet, which analysts at Talbot use for production planning purposes: 

Required

a. What is the optimal production schedule for Talbot Industries? In other words, how many TI-12s and TI-28s should the company produce each month to maximize monthly profit?

b. If Talbot Industries produces at the level found in requirement (a), how much will monthly profit increase over the current production schedule? 

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1 2 Price 3 Less variable costs per unit 4 Material Labor 5 56 6 Overhead A 7 Contribution margin per unit 8 9 Fixed costs 10 Manufacturing 11 Marketing and administrative 12 13 Machine hours per unit 14 15 16 Machine hours used 17 Machine hours available 18 19 Quantity produced 20 Maximum demand 21 Profit 22 23 B U TI-12 $80 23 29 8 $20 0.1 1,500 2,000 DE F TI-28 $290 90 64 20 $116 0.5 780 1,000 G H Total $34,000 $31,000 $65,000 540 540 $55,480 I