Limiting Factors. E-Z Chair Manufacturing Company produces two types of chairs, both of which are much in demand. The firm uses a special type direct material that results in a very comfortable chair. Variable unit costs are as follows: Direct materials Direct labor Variable factory overhead Variable selling and administrative Total.. E-Z EZ Sit Best $100 $200 175 175 50 50 25 25 $350 $450 Total fixed costs are the same, regardless of which dimir is produced. The E-Z.Sit sells for $600, the E-Z Rest for $800. Recently, there has been a shortage of direct materials and the company is unable to satisfy customer demand for either type of chair

a. Considering the direct materials constraint, and assuming that the firm decides to produce only ene syge of chair, which would be more profitable? Show computations.

b. Suppose purchases of direct materials are limited $25,000 per month. Calculate the difference in teal profit between producing the more profile clair and producing the less profitable one.