Santana Rey has found that Business Solutions's line of computer desks and chairs has become very popular, and she is finding it hard to keep up with demand. She knows that she cannot fill all of her orders for both items, so she decides she must determine the optimal sales mix given the resources she has available. Information about the desks and chairs follows. Desks Chairs Selling price per unit $1,370.50 $427.00 Variable costs per unit 450.00 188.00 Contribution margin per unit $ 920.50 $327.00 Direct labor hours per unit 7 hours 6 hours Expected demand for next quarter 160 desks 50 chairs Santana has determined that she only has 1.342 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.) Desks Chairs Contribution per direct labor hour Desks Chairs Total 160 50 Maximum number of units to be sold Hours required to produce maximum units For most profitable sales mix Desks Chairs Total 1,342 Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin Santana Rey has found that Business Solutions's line of computer desks and chairs has become very popular, and she is finding it hard to keep up with demand. She knows that she cannot fill all of her orders for both items, so she decides she must determine the optimal sales mix given the resources she has available. Information about the desks and chairs follows. Desks Chairs Selling price per unit $1,370.50 $427.00 Variable costs per unit 450.00 188.00 Contribution margin per unit $ 920.50 $327.00 Direct labor hours per unit 7 hours 6 hours Expected demand for next quarter 160 desks 50 chairs Santana has determined that she only has 1.342 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.) Desks Chairs Contribution per direct labor hour Desks Chairs Total 160 50 Maximum number of units to be sold Hours required to produce maximum units For most profitable sales mix Desks Chairs Total 1,342 Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin
