Question
Grissom Products installs standard and deluxe storage sheds. Selected data related to each product is as follows: Standard Deluxe Sales price per unit $2,000 $4,000
Grissom Products installs standard and deluxe storage sheds. Selected data related to each product is as follows:
| Standard |
| Deluxe |
Sales price per unit | $2,000 |
| $4,000 |
Direct materials per unit | 350 |
| 600 |
Direct labor per unit | 250 |
| 350 |
Variable overhead per unit | 100 |
| 200 |
Direct labor hours per unit | 4 |
| 6 |
Most of the installation process of the sheds is done using direct labor. There are a maximum of 24,000 direct labor hours available each year.
Required:
If there is unlimited demand for both products, how many of each type of shed should be installed in order to maximize profits?
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