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Woodland Co. manufactures three models, Basic, Delux, and Super. Estimated monthly demand and production volume for each model is provided in the following table. Only
Woodland Co. manufactures three models, Basic, Delux, and Super. Estimated monthly demand and production volume for each model is provided in the following table. Only 2,000 machine hours are available per month. The following per unit data apply: Basic Premium Supreme Maximum demand (in units) 500 150 100 Current production (in units) 400 120 100 Contribution margin per unit $70 $100 $120 Number of machine hours required 2 5 8 Required) Please answer all the following questions, and show your works and computations to get full credits. a. What is the total contribution margin at the current level of production for each model? b. What is the contribution margin per machine hour for each model? c. Given maximum capacity of 2,000 machine hours, how many machine hours would you recomiend of each model to maximize weekly production profits? How many units of each model? d. If there is no limit for machine hours available per week (instead of only 2,000 machine hour per week), how many chairs of each model should the company produce to maximize profits
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