16. Limited Resource decision

LO4, 5 16 Limited resource decision Edge produces two types of stylish boots: the men's boot and the women's boot. The two types of boots are similar except that the women's boots use different materials. Both types are made using the same mach ines. It takes 30 minutes of machine time to produce one pair of men's boots, whereas it takes 60 minutes of machine time to produce one pair of women's boots. The difference in production time results mainly from the different materials used in construction. The relevant data concerning the two types are as follows: Men's Women's Sales price (per pair) $80 $70 Less: Direct materials 20 26 Direct labour 8 8 Variable overhead 16 20 Contribution margin $26 $26 1 hour Required machine time 0.5 hour REQUIRED If the amount of machine time available to Edge is limited, which boot should be produced first? b If the total machine time available is 320 hours per month and the demand for each type of boot is 500 pairs per month, how many of each type should be produced to maximise profit? (Round your answer to the nearest pair.) What other factors should be considered in this decision, and how would they impact the decision? C