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(20 points). Acadia Inc. manufactures sail boats and fishing boats. Acadia uses a specialized equipment to produce the fiberglass required to build the body of
(20 points). Acadia Inc. manufactures sail boats and fishing boats. Acadia uses a specialized equipment to produce the fiberglass required to build the body of their world-class boats. The specialized equipment has a maximum production capacity of 5,500 ton of fiberglass per month. Acadia's monthly fixed cost are $2,750,000. The following data pertain to its monthly operation: Product Sail boats Selling price Variable costs per unit Fiberglass required (tons) 20,000 17,000 2 Fishing boats 28,000 22,000 5 Assume now (and for the rest of this question) that Acadia enjoys great reputation for its boats and face unlimited demand for its boats and can sell any amount of sail boats and fishing boats that it can manufacture. g) What should be the production allocation of sail boats and fishing boats that maximizes profit? Sail boats: Fishing boats: h) Total contribution margin at this production allocation is: i) Maximum profit is: j) What is the maximum amount that Acadia would be willing to pay per month as extra- compensation to the night-shift workers to increase its equipment production capacity to 8000 tons of fiberglass per month
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