Famous Face Dolls Company manufactures and sells custom dolls through a network of specialty stores. The face of each doll is hand-painted by a highly skilled craftsperson in the image of a popular public figure. Large dolls (75-80 cm) sell for $200 each and have a unit variable cost of $80. Each large doll requires 30 minutes of painting time. Small dolls (40-45 cm) sell for $90 and have a unit variable cost of $66.00. Each small doll requires 15 minutes of painting time. Typical demand is 200 large dolls and 400 small dolls per month. Due to upcoming vacations, the amount of available face-painting time is limited to 180 hours for the next month.

To achieve the greatest contribution margin within the stated constraints, Famous Face Dolls should manufacture:

Question 10Answer

a.

300 small dolls and 150 large dolls

b.

320 small dolls and 200 large dolls

c.

400 small dolls and 160 large dolls

d.

400 small dolls and 200 large dolls