Determining the Optimal Product Mix with One Constrained Resource and a Sales Constraint

Comfy Fit Company manufactures two types of university sweatshirts, the Swoop and the Rufus, with unit contribution margins of $5 and $15, respectively. Regardless of type, each sweatshirt must be fed through a stitching machine to affix the appropriate university logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Swoop sweatshirt requires 6 minutes of machine time, and each Rufus sweatshirt requires 30 minutes of machine time.

Assume that a maximum of 51,110 units of each sweatshirt can be sold.

Required:

If required, round your answers to the nearest whole number.

1. What is the contribution margin per hour of machine time for each type of sweatshirt?

	Contribution Margin
Swoop
Rufus

2. What is the optimal mix of sweatshirt?

	Optimal Mix
Swoop
Rufus

3. What is the total contribution margin earned for the optimal mix?