answer question 3 (ALL)

3. (20 points) Acadia Inc. manufactures sail boats and fishing boats, Acadia uses a specialized equipment ta produce the fiberglass required to build the body of their world class boats. The specialized equipment has a maximum production capacity of 5.000 ton of fiberglass per month. Acadia's monthly fixed cost are $2,750,000. The following data pertain to its monthly operation: 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. Product B) What should be the production allocation of sail baats and fishing boats that maximizes profit? Selling price Variable costs per unit Fiberglass required (tons! Sailboats 20,000 17,000 2 Fishine boats 28,000 22,000 5 Sailboats: Fishing boats: h] Tatal contribution margin at this production allocation is Assume that Acadla faces the following monthly demand for its products: 1300 Sailboats and 700 fishing boats. a) What is the contribution margin per unit for each type of product? Sailboats: Fishing boats: i) Maximum profit is: b) What is the contribution margin ratia for each type of product? Sailboats: Fishing boats: i) 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? c) What's the production allocation of sail boats and fishing boats that maximizes prafit? Sailboats: Fishing boats d) Total contribution margin at this production allocation is el Maximum profit is: f] Acadia is considering creating a night shift to operate the specialized equipment during the night times. The night-shift operation of the equipment would increase the maximum fiberglass production capacity to 8,000 tons per month. What is the maximum amount that Acadia would be willing to pay per month as extra-compensation to the night-shift workers? 9 10