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1a 1b Santana Rey has found that Business Solutions's line of computer desks and chairs has become very popular and she is finding it hard
1a 1b Santana Rey has found that Business Solutions's line of computer desks and chairs has become very popular and she is finding it hard to keep up with demand. She knows that she cannot fill all of her orders for both items, so she decides she must determine the optimal sales mix given the resources she has available. Information about the desks and chairs follows. Desks Chairs Selling price per unit $944.00 $380.75 Variable coste per unit 410.00 260.00 Contribution margin per unit $534.00 $120.75 Direct labor hours per unit 4 hour 5 hours Expected demand for next quarter 169 deska 46 chairs Santana has determined that she only has 778 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix, (Round per unit amounts to 2 decimal places.) Desks 534.005 Chains 120.75 Contribution margin per unit Direct labor hours per unit Contribution per direct labor hour $ 133.505 Deaks 169 4025 Chairs 46 Total Maximum number of units to be sold Hours required to produce maximum units For most profitable sales mix Desks Chairs Total 778 Hours dedicated to the production of each product Units produced for most profitable sais mix Contribution margin perunt Total contribution margin Rory Company has a machine with a book value of $77,000 and a remaining five-year useful life. A new machine is available at a cost of $118.000, and Rory can also receive $76,000 for trading in its old machine. The new machine will reduce variable manufacturing costs by $21,500 per year over its five-year useful life. Calculate the incremental income. (Any losses or outflows should be entered with a minus sign.) Incremental income From Replacing Machine Incremental income incremental cost)
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