Answered step by step
Verified Expert Solution
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
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started