During your first week, you learn that Lake Superior Clothing produces and sells(online only)four products. Shirts cost $24 to make and sell for $40, Jeans cost $20to make and sell for $40, Shorts cost $14to make and sell for $35, and Hoodies cost $56 to make and sell for $80. As the new Co-CEO, you have some decisions to make.

a)In terms of Contribution Margin, which product(s)would you emphasize?(hint: rank products 1-4 in terms of profitability)

b)In terms of Contribution Margin Ratio, which product(s)would emphasize?(hint: rank)You also learn that Lake Superior Clothing has one machine(Bulldog 3000)that produces all four products. The Bulldog 3000can only produce one product at a time and its total capacity is 2000 machine hours per period. In one machine hour, it can produce 25 shirts, or 10Jeans, or 14Shorts or 10Hoodies. Lake Superior Clothing can sell all the apparel produces. Additionally, fixed cost are the same and do not differ between the alternative product strategies(hence, can be ignored).

c)In terms of the hourly Contribution Margin (per machine hour), which product would you emphasize?That is, which product would provide the highest contribution margin on terms of each machine hour and total machine capacity?

d)Based on the capacity constraints, how would you prioritize products for optimal profitability?At a presentation form theMarketing department, the Marketing Director (UMD Marketing Analytics program graduate) reported that demand for the next period is anticipated to be16,000 -Shirts, 6000 -Jeans, 7,000-Shorts, and 6,000 Hoodies.

e)Based on product demand and production capacity constraints, how would you allocate the 2000 machine hours for each product to achieve optimal profitability?a.What is the Contribution Margin at this optimal production configuration?

f)What other steps can you take to improve/optimizeLake Superiors profits?g)What other potential constraint(s) might be worth looking into?

h)If Lake Superior opens a retail location, what constraint(s) might need attention?