Determining the Optimal Product Mix with One Constrained Resource

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 there are no other constraints.

Required:

1. What is the contribution margin per hour of masseuse time for each type of massage? When computing your answers, round contribution margin to two decimal places.

	Contribution Margin
Full Body	$fill in the blank 1 per hour
Trouble Spots	$fill in the blank 2 per hour

2. What is the optimal mix of massages? If an amount is zero, enter "0".

	Optimal Mix
Full Body	fill in the blank 3 units
Trouble Spots	fill in the blank 4 units

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

$fill in the blank 5