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Slavin Corporation manufactures two products, Alpha and Delta. Each product requires time on a single machine. The machine has a monthly capacity of 500 hours.
Slavin Corporation manufactures two products, Alpha and Delta. 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 limited to 170 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. Total Alpha $ 125 Delta $155 17 23 14 32 35 14 Price Less variable costs per unit Material Labor Overhead Contribution margin per unit Fixed costs Manufacturing Marketing and administrative $ 71 $ 74 $ 7,400 $ 4,400 $11,800 2.0 2.5 495 500 Machine hours per unit Machine hours used Machine hours available Quantity produced Maximum demand Profit 110 170 $4,150 110 170 Required: a. 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? b. If Slavin produces at the level found in requirement (a), how much will monthly profit increase over the current production schedule? Complete this question by entering your answers in the tabs below. Required A Required B 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? (Do not round intermediate calculations.) Alphas units units Deltas
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