Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help answer this Santana Rey sees that Business Solutions's line of computer desks and chairs is popular, and she is finding it hard to
Please help answer this
Santana Rey sees that Business Solutions's line of computer desks and chairs is popular, and she is finding it hard to keep up with demand. Santana only has 1166 direct labor hours available. She must determine the best sales mix given her limited hours. Information about the desks and chairs follows. Desks Chairs Selling price per unit $ 1,260.50 $ 471.25 Variable costs per unit 500.00 210.00 Contribution margin per unit $ 760.50 $ 261.25 Direct labor hours per unit 6 hours 5 hours Maximum demand per quarter 166 desks 47 chairs Required: Determine the best sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.) Total Desks Chairs Contribution margin per unit $ 760.50 $ 261.25 Direct labor hours per unit 6 5 Contribution margin per direct labor hour $ 126.75 $ 52 25 Desks Chairs Maximum number of units to be sold 166 47 Hours required to produce maximum units 996 235 The company does not have enough hours to fill maximum demand. For most profitable sales mix Desks Chairs Hours dedicated to the production of each product 996 1,231 Total 1,166 996.00 Units produced for most profitable sales mix Contribution margin per unit Total contribution margin Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started