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Santana Rey has found that her line of computer desks and chairs has become very popular and she is finding it hard to keep up
Santana Rey has found that her 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. I'm not sure how to do the last part. Are the parts I completed correct?
Desks $1,223.75 Chairs $385.00 220.00 Selling price per unit Variable costs per unit Contribution margin per unit Direct labor hours per unit 530.00 $ 693.75 $165.00 5 hours 175 desksS 4 hours 48 chairs Expected demand for next quarter Santana has determined that she only has 1,015 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 Sales Variable costs Contribution per direct labor hour 1,223.75 $ 385.00 220 165.00 530 693.75 $ Desks Chairs Total 175 48 192 The company does not have enough hours to fill maximum demand. Maximum number of units to be sold Hours required to produce maximum units 875 1,067 For most profitable sales mix Desks Chairs Total Hours dedicated to the production of each 875 140 1,015 roduct Units produced for most profitable sales mix Contribution margin per unit Total contribution marginStep by Step Solution
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