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NK Co. manufactures two types of women's wallets: Model 1 and Model 2. Cost and revenue data for each model is shown below: Model 1
NK Co. manufactures two types of women's wallets: Model 1 and Model 2. Cost and revenue data for each model is shown below: Model 1 Model 2 Selling price per unit $50 $70 Variable cost per unit $35 $40 The plant that makes these wallets is operating at capacity. The company is currently using all the available sewing machine hours which is 15,000 hours per month. Model 1 requires 2.5 hours of sewing machine time (there's more pockets and zippers on this model) while Model 1 requires 1.5 hours of sewing machine time Demand is 3,500 and 4,500 units for Model 1 and Model 2 respectively. Required: ho a. Which model should the company focus on given the constraint with machine hours? Use calculations to support your answer. b. The company has determined that a minimum of 3,000 units should be made of each model. Calculate the total number of units of each model to produce
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