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Sandalwood Company produces various lines of high-end carpeting in its Asheville, North Carolina, plant. This question pertains to two different grades of carpet in its
Sandalwood Company produces various lines of high-end carpeting in its Asheville, North Carolina, plant. This question pertains to two different grades of carpet in its Symphony line: commercial and residential. Selling price Sales forecast Variable manufacturing cost Fixed manufacturing cost Direct labor hours requirement Commercial RM16 per square meter 30,000 square meters RM10 per square meter RM1.50 per square meter 12 hours per 100 square meters Residential RM25 per square meter 8,000 square meters RM15 per square meter RM2.25 per square meter 18 hours per 100 square meters The number of available labor-hours at the plant is limited to 4600 hours per week. Required: a. What is the gross profit (margin) for each of the two products, in total and per square meter? b. What is the contribution margin for each of the two products, in total and per square meter? C. Given the labor constraint and the product demand constraints, what is the optimum product mix, on weekly basis, for each of the two products? Show your calculation
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