Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Santana Rey sees that Business Solutionss line of computer desks and chairs is popular, and she is finding it hard to keep up with demand.

Santana Rey sees that Business Solutionss line of computer desks and chairs is popular, and she is finding it hard to keep up with demand. Santana only has 1,015 direct labor hours available. She must determine the best sales mix given her limited hours. Information about the desks and chairs follows.

Desks Chairs
Selling price per unit $ 1,125 $ 375
Variable costs per unit 500 200
Contribution margin per unit $ 625 $ 175
Direct labor hours per unit 5 hours 4 hours
Maximum demand per quarter 175 desks 50 chairs

Required: Determine the best sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.)

image text in transcribed

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

More Books

Students also viewed these Accounting questions