Question
Trailblazers produced two types of boots: men's and women's. The two types of boots are similar, except the women's boots are more stylish. Both the
Trailblazers produced two types of boots: men's and women's. The two types of boots are similar, except the women's boots are more stylish. Both the men's and women's boots are made with the same machine. It takes 15 minutes of machine time to produce one pair of men's boots, whereas it takes 30 minutes of machine time to produce one pair of women's boots. The difference in production time results mainly from the different materials used in construction. The relevant data concerning the two types of boots are as follows:
Men's | Women's | |
Sales price (per pair) | $35 | $40 |
Less: Direct Materials | 10 | 13 |
Direct Labor | 4 | 4 |
Variable Overhead | 8 | 10 |
Contribution Margin | $13 | $13 |
Required machine time | 1/4 hour | 1/2 hour |
A. If the amount of machine time available is limited, which boot should be produced first?
B. If the total machine time available is 640 hours per month and the demand for each type of boot is 1,000 pairs per month, how many of each type should be produced to maximize profit? (Round answer to the nearest pair.)
C. What other factors should be considered in this decision, and how would they affect the decision?
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