Question
Riverbed Corporation makes two products, footballs and baseballs. Additional information follows: Footballs Baseballs Units 2,000 2,500 Sales $99,600 $41,500 Variable costs 39,840 22,825 Fixed costs
Riverbed Corporation makes two products, footballs and baseballs. Additional information follows:
Footballs | Baseballs | |||||
---|---|---|---|---|---|---|
Units | 2,000 | 2,500 | ||||
Sales | $99,600 | $41,500 | ||||
Variable costs | 39,840 | 22,825 | ||||
Fixed costs | 16,600 | 8,715 | ||||
Net income | $43,160 | $9,960 | ||||
Yards of leather per unit | 1.25 | 0.30 | ||||
Net income per unit | $21.58 | $3.98 | ||||
Unit contribution margin | $29.88 | $7.47 |
Assume that Riverbed is able to order an additional 3,500 yards of leather and wishes to maximize its net income. Of the additional units it produces, at least 700 of each product are necessary for sales. How many units of each must be produced? (Round contribution margin per yard to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 5,275.)
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