Lattie-Dah, Inc., is a small company that manufactures three versions of outdoor hammock. Unit information for its products follows:

Lattie-Dah has determined that it can sell a limited number of each hammock in the upcoming year. Expected demand for each model follows:

Required:

1. Suppose that direct labor hours has been identified as a constrained resource with a maximum of 26,000 hours available per year. Assuming an infinite demand for each of Lattie- Dah s products, determine the company’s preferred production. Justify your answer.

2. If the number of direct labor hours is the only constrained resource, determine the number of units of each hammock that Lattie-Dah should produce to maximize its profit.

3. Suppose that the number of machine hours has been identified as the only constrained resource with a maximum of 230,000 hours available per year. Assuming unlimited demand for each of Lattie-Dah’s products, determine the company’s preferred production. Justify your answer.

4. If the number of machine hours is the only constrained resource, determine the number of units of each hammock that Lattie-Dah should produce to maximize its profit.

Transcribed Image Text:

Hammock A Hammock B Hammock C $30 $40 $50 Sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Required number of labor hours Required number of machine hours 6 12303 0.10 7 32402 0.75 852512 7 2.50 2.0 0.30