Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Taylor Inc. manufactures three chair models, Standard, Premium, and Deluxe. The following per unit data per week apply: Standard Premium Deluxe Total Maximum weekly demand
Taylor Inc. manufactures three chair models, Standard, Premium, and Deluxe. | |||||
The following per unit data per week apply: | |||||
Standard | Premium | Deluxe | Total | ||
Maximum weekly demand (in units) | 200 | 150 | 200 | 550 | units |
Current weekly production (in units) | 150 | 150 | 200 | 500 | units |
Contribution margin per unit | $28 | $30 | $40 | ||
Number of machine hours required | 2 | 3 | 5 | ||
Maximum Machine hours per week | 1,750 | hours | |||
Required: | |||||
a) What is the contribution margin per machine hour for each model? | |||||
b) What is the total contribution margin at the current level of production for each model? | |||||
c) Given maximum capacity of 1,750 machine hours, how many MHs would you recommend | |||||
of each model to maximize weekly production profits? How many units of each model? | |||||
d) If there is no limit for MHs available per week (instead of only 1,750 MHs per week), | |||||
how many chairs of each model should Atlanta produce to maximize profits? | |||||
e) Max Profits with no capacity limit but with 500 units to sell? |
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