Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

 image

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. Selling price per unit Variable costs per unit Contribution margin per unit Direct labor hours per unit Expected demand for next quarter Desks $1,073.00 530.00 $ 543.00 Chairs $336.75 210.00 $126.75 4 hours 164 desks. 3 hours 43 chairs Santana has determined that she only has 752 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.) 25 points Contribution margin per unit Direct labor hours per unit Contribution per direct labor hour Desks Chairs eBook Print Maximum number of units to be sold Desks Chairs Total 164 43 Hours required to produce maximum units References For most profitable sales mix Desks Chairs Total Hours dedicated to the production of each product 752 Units produced for most profitable sales mix Contribution margin per unit $ 543.00 $ 126.75 Total contribution margin $ 0 $ 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: John Wild, Ken Shaw

5th edition

978-1259176494, 1259176495, 978-1259347641, 1259347648, 978-0078025600

More Books

Students also viewed these Accounting questions

Question

BaSO4 would be product of the reaction of what acid and what base?

Answered: 1 week ago