Constrained Resources

4. Skiing Accessories has 3,000 machine hours of plant capacity available for manufacturing sun goggles. Following is information about these products.

Premium Regular

Selling price per unit $50 $30

Variable cost per unit $35 $10

Units that can be manufactured per machine

hour on the same production line 8 5

Estimated demand 12,000 goggles 21,000 goggles

How many machine hours should be devoted to the manufacture of each product?

What is the maximum amount that Skiing Accessories would be willing to spend, both per hour and in total, to increase capacity?