Question
Range Rider Industries manufactures chairs and tables that are in high demand by local office furniture stores. Following is information for each of these products:
Range Rider Industries manufactures chairs and tables that are in high demand by local office furniture stores. Following is information for each of these products:
Chairs | Tables | |||
Selling price per item | $62.00 | $76.00 | ||
Variable cost per item | 51.00 | 64.00 | ||
Contribution margin per item | $11.00 | $12.00 | ||
Machine hours per item | 1.6 | 1.6 |
Range Rider has 900 machine hours available each month. The demand for chairs is 560 units per month and the demand for tables is 340 units per month. In order to maximize the companys total contribution margin, how should Range Rider allocate its production capacity between the chairs and tables (if necessary, round partial units down to the next nearest full unit)?
| 340 Tables and 222 Chairs. |
| 340 Tables and 560 Chairs. |
| 562 Tables and 0 Chairs. |
| 562 Chairs and 0 Tables. |
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