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Logerfeld Inc. produces three models of hand-sewn premium handbags. Logerfeld is reviewing its production and sales budget for the next quarter. The available information pertaining
Logerfeld Inc. produces three models of hand-sewn premium handbags. Logerfeld is reviewing its production and sales budget for the next quarter. The available information pertaining to the three products is given below: Model 101 Model 103 Selling Price Labour ($20 per hour) Other Variable Costs 600 300 100 160 70 300 40 12 230 52 48 Contribution/Unit 210 70 Maximum Demand (in units) 200 600 1,000 Logerfeld Inc. expects the number of labour hours available to be strictly limited to 7,800 hours in total for the quarter (i Advise the production manager at Logerfeld on the optimum production mix. Compute the expected maximum total contribution margin for Logerfeld's next quarter A customer has approached Logerfeld for the production of a special order that will require 3,000 labour hours in the next quarter. What is Logerfeld's relevant cost of obtaining the 3,000 labour hours needed for this special order? (ii)
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