Chapter 4 Homework # 6 Austin Enterprises makes and sells three types of dress shirts. Management is trying to determine the most profitable mix. Sales prices, demand, and use of manufacturing inputs follow: Basic Classic Formal Sales price 30 64 Maximum annual demand (units) 20,000 10,000 Input requirement per unit 0.5 0.3 Direct material yards yards 0.7 Direct labor 2 hours hours Costs $ Variable costs Materials Direct labor Factory overhead Marketing 20 per yard 16 per hour $ S 4 per direct labor-hour 10% of sales price Annual fixed costs $36,000 Manufacturing Marketing Administration $ 8,000 $30,000 The company faces two limits: (1) the volume of each type of shirt that it can sell (see maximum annual demand) and (2) 30,000 direct labor-hours per year caused by the plant layout. Required: Complete the excel worksheet to determine: + S S S 190 30,000 0.6 yards 7 hours a. How much operating profit could the company earn if it were able to satisfy the annual demand? b. Which of the three product lines makes the most profitable use of the constrained resource, direct labor? c. Given the information in the problem so far, what product mix do you recommend? d. How much operating profit should your recommended product mix generate