Mountain Goat Cycles also makes saddle bags for its bicycles. There are two types, the Mountain bag and the Touring bag.

Mountain Touring

Selling price per unit $25 $30

Variable cost per unit $10 $18

Contribution Margin per unit $15 $12

Contribution Margin ratio 60% 40%

At Mountain Goat, the stitching machine is the constrained resource (or bottleneck). Additional information is as follows:

The stitching machine has a capacity of 2400 minutes per week.

The Mountain bag requires 1 minute of stitching time

The Touring bag requires minute of stitching time

Current demand for the Mountain bag is 2000 units per week

Current demand for the Touring bag is 2400 units per week.

Based on the above information, how many units of each bag should be produced to utilize the constrained resource to its fullest and get the most money for the company?

Struggling with the step process