Rupert Wood Company makes a regular and a deluxe grade of wood floors. Regular grade is sold at $13 per square yard, and the deluxe grade is sold at $22 per square yard The variable cost of making the regular grade is $10 per square yard. It costs an extra $4 per square yard to make the deluxe grade. It takes 15 labor hours to make 100 square yards of the regular grade, and 20 labor hours to make 100 square yards of the deluxe grade. There are 4,000 hours of labor time available for production each week The maximum weekly sales for the regular und the deluxe model are 25.000 and 5,000 square yards, respectively Fixed production costs total $650,000 per year. All selling costs are fixed.

Requirement

What is the optimal production level in number of square yards for eachproduct?

Requirement What is the optimal production level in number of square yards for eachproduct?

Begin by calculating the contribution margin per direct labor hour for each product grade. (Abbreviations used: DLH= Direct laborhour)

Regular Deluxe

Sales price per square yard

Variable cost per square yard

Contribution margin per square yard

DLH required per square yard

Contribution margin per DLH

What is the optimal production level in number of square yards for eachproduct?

Rupert Wood Company should produce ....square yards of the (deluxe grade or regular grade) first and then use the remaining available capacity to produce ..... square yards of the (deluxe grade or regular grade)