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Chisholm Industries solved the following linear programming problem as the basis for its budget for the next operating period. Fixed costs are budgeted as

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Chisholm Industries solved the following linear programming problem as the basis for its budget for the next operating period. Fixed costs are budgeted as $80 per unit. Chrisholm produces two products, the "regular" and the "premium". Objective function: Maximize $250x Regular + $300 Premium Subject to: Assembly hours constraint: 10 hours Regular +5 hours Premium 2,000 hours Testing hours constraint: 5 hours Regular + 20 hours Premium 10,000 hours Excel's Solver function produced the output shown below: Variable Cells Cell Name $B$11 Number to produce Regular $C$11 Number to produce Premium Final Reduced Objective Allowable Allowable Value Cost CoefficientIncrease Decrease 0 400 -350 250 350 1E+30 0 300 1E+30 175 Constraints Final Shadow Constraint Allowable Allowable Cell Name $B$15 Value Price R.H. Side Increase Decrease _Labor availability for assembling Hours used 2000 60 2000 500 2000 8000 0 10000 1E+30 2000 $B$16 _Labor availability for testing Hours used a) What quantity of each product should they produce? (2 marks) Regular = Premium = b) What is the total contribution margin with this sales mix? (1 mark) Total contribution margin with this sales mix is $

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