Peak Industries manufactures two types of ATVs, Riders and Ranchers. Riders sell for $8,000 per unit and Ranchers sell for $15,000 per unit. Per unit variable manufacturing costs are $5,000 for a Rider and $9,000 for a Rancher. It takes 100 direct labor hours to produce a Rider, and 300 direct labor hours to produce a Rancher. Peak has only 30,000 direct labor hours available each month. ATVs are in high demand, so Peak can sell all the output of either model.

a. How many units of each model should Peak produce in a month? What is the total monthly contribution margin?

b.Now assume that only 200 Riders can be sold each month. How many units of each model should

Peak produce in a month? What is the total monthly contribution margin?