Question 5 The Furniture Division of BMC can produce two different types of tables, the round tables, and the rectangular tables. There is a question regarding how many should the Furniture Division produce for each product. Table 5 - Chairs Production Per unit of chair Round Tables Rectangular Tables Sales price $400.00 $450.00 Variable expenses $200.00 $260.00 Page 7 of 10 Contribution margin Contribution margin ratio $200.00 50% $190.00 42% You are analysing the product-mix options under specific capacity constraints: one unit of a round table requires 4 machine hours, and one unit of a rectangular table requires 3 machine hours; the Furniture Division has 2,000 machine hours available to produce these products. BMC also requires the Furniture Division to produce at least 200 units for each kind of chair. Required How many units of round and rectangular tables should the Furniture Division of BMC produce for maximizing the division profit and why? Use your calculations for supporting your argument and showing the maximum contribution margin (i.e., total revenues minus variable expenses) the Furniture Division can achieve. (Product- mix decisions under capacity constraints, 10 marks)