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7) Gallery Corporation makes two products, footballs and baseballs. Additional information follows: Footballs Baseballs Units 2,000 2,500 Sales $60,000 $25,000 Variable costs 24,000 13,750 Fixed
7) Gallery Corporation makes two products, footballs and baseballs. Additional information follows: Footballs Baseballs Units 2,000 2,500 Sales $60,000 $25,000 Variable costs 24,000 13,750 Fixed costs 10,000 5,250 Net income $26,000 $ 6,000 Yards of leather per unit 1.25 0.25 Profit per unit $13.00 $2.40 Contribution margin per unit $18.00 $4.50 Assume that Gallery is able to order an additional 2,500 yards of leather and wishes to maximize its income. Of the additional units it produces, at least 400 of each product are necessary for sales. Instructions How many units of each must be produced? 12 Marks
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