Santana Rey has found that her 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. Desks Chairs Selling price per unit $ 1,125 $ 375 Variable costs per unit 500 200 Contribution margin per unit $ 625 $ 175 Direct labor hours per unit 5 hours 4 hours Expected demand for next quarter 175 desks 50 chairs Santana has determined that she only has 1,015 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. Â Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Input all amounts as positive values. Omit the "$" sign in your response). Please avoid solutions in an image thanx
Santana Rey has found that her 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. Desks Chairs Selling price per unit $ 1,125 $ 375 Variable costs per unit 500 200 Contribution margin per unit $ 625 $ 175 Direct labor hours per unit 5 hours 4 hours Expected demand for next quarter 175 desks 50 chairs Santana has determined that she only has 1,015 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. Â Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Input all amounts as positive values. Omit the "$" sign in your response). Please avoid solutions in an image thanx
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Santana Rey has found that her 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.
| Desks | Chairs | |||||
| Selling price per unit | $ | 1,125 | $ | 375 | ||
| Variable costs per unit | 500 | 200 | ||||
| Contribution margin per unit | $ | 625 | $ | 175 | ||
| Direct labor hours per unit | 5 | hours | 4 | hours | ||
| Expected demand for next quarter | 175 | desks | 50 | chairs | ||
|
Santana has determined that she only has 1,015 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available. |
Â
| Required: |
|
Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Input all amounts as positive values. Omit the "$" sign in your response). |
Please avoid solutions in an image thanx
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