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

Relax Spas provides two types of massage services, the Full Body and the Trouble Spots, with unit contribution margins of $198 and $90, respectively. Regardless of type, each massage requires the use of a certified masseuse. Relax Spas has four masseuses on staff who each work 1,500 hours per year. Each Full Body massage uses 90 minutes of masseuse time, and each Trouble Spot massage uses 30 minutes of masseuse time.

Assume that a maximum of 8,000 massages of each type can be sold.

Required:

1. What is the contribution margin per hour of masseuse time for each type of massage?

	Contribution Margin
Full body	$ per hour
Trouble spots	$ per hour

2. What is the optimal mix of massages?

	Optimal Mix
Full body massages	units
Trouble spots massages	units

3. What is the total contribution margin earned for the optimal mix? Be sure to use the whole number units computed in #2.

$