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Santana Rey has found that Business Solutions's line of computer desks and chairs has become very popular, and she is finding it hard to keep up with demand. She knows that she cannot fill all of her orders for both items, so she decides she must determine the optimal sales mix given the resources she has available. Information about the desks and chairs follows. Selling price per unit Variable costs per unit Contribution margin per unit Direct labor hours per unit Expected demand for next quarter Desks $950.00 430.00 $520.00 Contribution margin per unit Contribution per direct labor hour 4 hours 162 desks Maximum number of units to be sold Hours required to produce maximum units Santana has determined that she only has 765 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.) Desks Chairs $452.75 290.00 $162.75 Desks 3 hours 50 chairs 162 Chairs Chairs 50 Total

Santana Rey has found that Business Solutions's line of computer desks and chairs has become very popular, and she is finding it hard to keep up with demand. She knows that she cannot fill all of her orders for both items, so she decides she must determine the optimal sales mix given the resources she has available. Information about the desks and chairs follows. Selling price per unit Variable costs per unit Contribution margin per unit Direct labor hours per unit Expected demand for next quarter Desks $950.00 430.00 $520.00 Contribution margin per unit Contribution per direct labor hour 4 hours 162 desks Maximum number of units to be sold Hours required to produce maximum units Santana has determined that she only has 765 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.) Desks Chairs $452.75 290.00 $162.75 Desks 3 hours 50 chairs 162 Chairs Chairs 50 Total

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject :- Accounting 

Santana Rey has found that Business Solutions's line of computer desks and chairs has become very popular, and she is finding it hard to keep up with demand. She knows that she cannot fill all of her orders for both items, so she decides she must determine the optimal sales mix given the resources she has available. Information about the desks and chairs follows. Selling price per unit Variable costs per unit Contribution margin per unit. Direct labor hours per unit Expected demand for next quarter Contribution margin per unit Desks $950.00 430.00 $520.00 Contribution per direct labor hour 4 hours 162 desks Santana has determined that she only has 765 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. Maximum number of units to be sold Hours required to produce maximum units Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.) Desks Chairs $452.75 290.00 $162.75 Desks 3 hours 50 chairs 162 Chairs Chairs 50 Total
Transcribed Image Text:Santana Rey has found that Business Solutions's line of computer desks and chairs has become very popular, and she is finding it hard to keep up with demand. She knows that she cannot fill all of her orders for both items, so she decides she must determine the optimal sales mix given the resources she has available. Information about the desks and chairs follows. Selling price per unit Variable costs per unit Contribution margin per unit. Direct labor hours per unit Expected demand for next quarter Contribution margin per unit Desks $950.00 430.00 $520.00 Contribution per direct labor hour 4 hours 162 desks Santana has determined that she only has 765 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. Maximum number of units to be sold Hours required to produce maximum units Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.) Desks Chairs $452.75 290.00 $162.75 Desks 3 hours 50 chairs 162 Chairs Chairs 50 Total
Santana has determined that she only has 765 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.) Contribution margin per unit Contribution per direct labor hour Maximum number of units to be sold Hours required to produce maximum units For most profitable sales mix Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin Desks Desks Desks 162 Chairs Chairs Chairs 50 Total Total 765
Transcribed Image Text:Santana has determined that she only has 765 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.) Contribution margin per unit Contribution per direct labor hour Maximum number of units to be sold Hours required to produce maximum units For most profitable sales mix Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin Desks Desks Desks 162 Chairs Chairs Chairs 50 Total Total 765
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