question 3&4

3. Multi Company can sell all of the units of furniture it produces, but it has limited production capacity. It can produce 7 chairs or 2 couches per hour and it has 6,000 production hours available. Contribution margin for the chairs is $40 and for the couches $120. What is the most profitable sales mix in units? What if there is only a demand for 28,000 chairs? What is the total contribution margin at the most profitable sales mix? 4. Woody's Tennis Racket Company is considering purchasing a new machine to string tennis rackets. The current machine cost $40,000, has accumulated depreciation of $25,000, could be sold today for $8,000, and has annual operating costs of $9,000. The new machine costs $45,000. Annual operating costs for the new machine are expected to be $5,000. Both the new and old machine have an expected life of 10 years. At the end of the 10 years, neither machine is expected to have any salvage value. Should Woody's keep the old machine or purchase a new machine