Peller Co. manufactures two tables, Small and Large.Machine hour capacity is 8,000 hours per year.Total fixed costs are $19,600.Product information is provided below:

SmallLarge

Unit selling price$100$210

Unit costs:

Variable manufacturing(50) (120)

Fixed manufacturing(10)(15)

Variable selling and administrative (18)(18)

Unit profit$22$57

Demand in units1,000600

Machine hours per unit410

(Show all your computations.)

a. Which table has the higher contribution margin per unit?

b. Which table has the higher contribution margin per machine hour?

c. How many tables of each size should be produced using the short-run profit maximizing strategy, and what is the maximum operating income?

d. If there are 11,000 machine-hours available per year, how many tables of each size should Peller Co. produce to maximize profits?What is the maximum contribution margin?