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Victoria Co. manufactures three models, Standard, Premium, and Deluxe. Estimated monthly demand and production volume for each model is provided in the following table. Only
Victoria Co. manufactures three models, Standard, Premium, and Deluxe. Estimated monthly demand and production volume for each model is provided in the following table. Only 650 machine hours are available per month. The following per unit data apply:
| Standard | Premium | Deluxe |
Maximum demand (in units) | 500 | 150 | 50 |
Current production (in units) | 400 | 150 | 50 |
Contribution margin per unit | $50 | $60 | $70 |
Number of machine hours required | 2 | 4 | 5 |
Required) Please answer all the following questions, and show your works and computations .
- What is the total contribution margin per unit and per machine hour at the current level of production for each model? Show your work (i.e., formula and computation)
- What is the contribution margin per machine hour for each model? Show your work (i.e., formula and computation)
- Given maximum capacity of 650 machine hours, how many machine hours would you recommend of each model to maximize weekly production profits? How many units of each model? Show your work (i.e., formula and computation) to get full credits.
- If there is no limit for machine hours available per week (instead of only 650 machine hour per week), how many chairs of each model should Katy produce to maximize profits? Show your work (i.e., formula and computation) to
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