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Windy Manufacturing Lid. produces two products, lawn mowers and power washers. Lawn mowers have a unit contribution margin of $75, and power washers have a
Windy Manufacturing Lid. produces two products, lawn mowers and power washers. Lawn mowers have a unit contribution margin of $75, and power washers have a unit contribution margin of $55. The demand for lawn mowers exceeds their production capacity, which is limited by available direct labour and machine hours. The demand for power washers is around 150 per week. Management desires that the product mix should maximize the weekly contribution toward fixed costs and profits. Direct manufacturing labour is limited to 600 hours a week and 400 hours is all that the company's outdated machines can run a week. The lawn mowers require 1.5 hours of labour and 2 machine hours. Power washers require 2.5 labour hours and 2 machine hours. REQUIRED: a. Set up the table, including data and constraints, needed to run solver. (4 marks) Use solver to answer the following questions: b. Calculate the total contribution margin. (2 marks) C. If Windy Manufacturing purchases new machines that can run up to 600 hours per veek, what effect will this have on the company's overall profits? Re-run solver and show your calculation relating to the contribution margin change. (1 mark) d. Identify two other factors that Windv Manufacturing should consider before deciding
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