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Handi-Tool Company Manufactures and Sells Lawn and Garden Tools A)200,000 Snip-It; 100,000 Deluxe Clipper, 0 Limb-Away

Question 49

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Handi-Tool Company manufactures and sells lawn and garden tools.Handi manufactures three kinds of pruning shears: Snip-It, Deluxe Clipper, and Limb-Away.The demand for the pruning shears is highest in April.Expecting this trend to continue, Handi is interested in how to best utilize available capacity.Given the following information, what combination of pruning shears should Handi-Tool produce?  Deluxe  Limb-  Snip-It  Clipper  Away  Demand 200,000100,00060,000 Unit Price $20$30$50 Unit variable cost $10$15$20 Unit contribution margin $10$15$30 Production rate (units per hour)  502515 Available production hours 8,000hrs Total fixed costs $400,000\begin{array}{lrrr}&& \text { Deluxe } & \text { Limb- } \\&\text { Snip-It } & \text { Clipper } & \text { Away }\\\text { Demand } & 200,000 & 100,000 & 60,000 \\\text { Unit Price } & \$ 20 & \$ 30 & \$ 50 \\\text { Unit variable cost } & \$ 10 & \$ 15 & \$ 20 \\\text { Unit contribution margin } & \$ 10 & \$ 15 & \$ 30 \\\text { Production rate (units per hour) } & 50 & 25 & 15\\\text { Available production hours } &&& 8,000 \mathrm{hrs} \\\text { Total fixed costs } &&& \$ 400,000\end{array}


A) 200,000 Snip-It; 100,000 Deluxe Clipper, 0 Limb-Away.
B) 200,000 Snip-It; 60,000 Limb-Away; 0 Deluxe Clipper.
C) 100,000 Deluxe Clipper; 60,000 Limb-Away; 0 Snip-It.
D) 200,000 Snip-It; 100,000 Deluxe Clipper; 60,000 Limb-Away.
E) 150,000 Snip-It; 75,000 Deluxe Clipper; 45,000 Limb-Away.

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