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Savin Corporation manufactures two products, Alpha and Delts. Each product requires time on a single machine. The machine has a monthly capacity of 500
Savin Corporation manufactures two products, Alpha and Delts. Each product requires time on a single machine. The machine has a monthly capacity of 500 hours. Total market demand for the two products is ed to 150 units (each) monthly Slavin is currently producing 110 Alphas and 110 Deltas each month. Cost and machine-usage data for the two products are shown in the following table, which Slavin managers use for planning purposes: Price Las vanable costs per unit Material Labor Overhead Contribution margin per un Fixed costs Manufacturing Markeling and administrative Machine hours per uni Machine hours used Machine hours avalable Quantity produced Maximum demand Proft Alpha $ 121 Delta $151 Total 10 33 24 M 16.5 18 $625 $64 $7,000 $4.600 $12.200 20 25 495 500 110) $1,715 110 150 150 Required: What is the optimal production schedule for Slavin? In other words, how many Alphas and Deltas should the company produce each month to maximize monthly profit? Alphas Detas units units b. if Slavin produces at the level found in requirement (a), how much will monthly profit increase over the current production schedule? prufa ty
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