a Note: Each of the following scenarios is independent 1. The Company has only 400 square feet of wood available for the frames. a. How many units of each model should be made? . What is the total contribution margin under the optimal product mix? 2. The Company has 500 labor hours available. How many units of each model should be made? b. What is the total contribution margin under the optimal product mix? 3. The Company has unlimited resources. a. What product should the company's marketing department be emphasizing? 4 Assume that Ralph has enough resources to manufacture the 2 products above, but nothing else. He can contract with Disney World to produce the Caricature product line for a purchase price of $175 per unit (Ralph would pay Disney for the paintings but then Ralph would sell to the final customer). Ralph would produce another line of art with the resources - Beach Scenes. Ralph is hoping the Beach Scene line would sell well on the West Coast of Florida. Me expects to sell 250 paintings of the beach scene for a contribution margin of $75 per picture. Ralph would allocate $40 in rent to the new product line. Should Ralph outsource the Caricature product line and produce the Beach Scenes? 5. What are some non-quantitative factors that should be considered by the company to develop a product mix strategy? Chapter 11 Computer Case Total Beach Selling Price cost of frame @ $5 per square foot other direct materials Direct labor @ $20 per hour variable over $10 per picture Allocated Rent Market Demand (units) Impressionism $ 160,00 $ 10.00 $ 50.00 $ 30.00 $ 10.00 $ 40.00 100 Caricature $ 200.00 $15.00 $ 20.00 $ 30,00 $ 20,00 $ 40.00 200 400 500 Constrained resources: 5 Square feet 6 Labor hours 7 8 9 eo Beach Scene: 21 CM/unit 2 Demand 23 Cost of outsourcing Caricature line to Disney 24 25 26 27 28 29 25 250 175