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Only 1 of the 2 sandwiches can be chosen. Which option would maximize profits given that there are only 400 hours left. There can also
Only 1 of the 2 sandwiches can be chosen. Which option would maximize profits given that there are only 400 hours left. There can also not be any increases to the # of labour hours
Appendix Sandwich Information Existing Chacarero Pambazo Beef Chorizo Cubana Delight Proposed Chile's Mediterranean Chivito Light 0.08 0.06 0.05 0.07 0.05 Labour per unit (hours) Estimated demand (units) Total labour hours 30,000 35,000 42,000 15,000 15,000 2,400 2,100 2,100 1,050 750 $9.50 $9.55 $9.00 $10.00 $8.00 (4.35) (4.55) (5.00) (4.85) (3.40) Sales price Direct materials Direct labour (1) Fixed overhead (2) Profit (0.96) (0.72) (0.60) ( (0.84) (0.60) (3.43) $0.76 (3.43) $0.85 (3.43) $(0.03) (3.43) $0.88 (3.43) $0.57 Note 1: Direct labour is based on a rate of $12 per hour. Note 2: Fixed overhead is applied on a per-unit basis of $3.43 per unit. Labour hours available Currently, there are 7,000 labour hours available annually for the production of sandwiches. Current production uses 6,600 hoursStep by Step Solution
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