Charlie's Chairs manufactures two models,Standard and Premium.Weekly demand is estimated to be 120 units of the Standard Model and 70 units of the Premium Model.Only 420 machine hours are available per week.The following per unit data apply:

Required:
a. For each model,compute the contribution margin per machine hour.
b. To maximize weekly production profits,how many machine hours would you recommend of each model? How many units of each model?
c. If there are 500 machine hours available per week (instead of only 420 machine hours per week),how many chairs of each model should Charlie's produce to maximize profits?

Question

Charlie's Chairs manufactures two models,Standard and Premium.Weekly demand is estimated to be 120 units of the Standard Model and 70 units of the Premium Model.Only 420 machine hours are available per week.The following per unit data apply:
  
Required:
a. For each model,compute the contribution margin per machine hour.
b. To maximize weekly production profits,how many machine hours would you recommend of each model? How many units of each model?
c. If there are 500 machine hours available per week (instead of only 420 machine hours per week),how many chairs of each model should Charlie's produce to maximize profits?

Quizplus · Accepted Answer

The Answer of Charlie's Chairs manufactures two models,Standard and Premium.Weekly demand is estimated to be 120 units of the Standard Model and 70 units of the Premium Model.Only 420 machine hours are available per week.The following per unit data apply:
  
Required:
a. For each model,compute the contribution margin per machine hour.
b. To maximize weekly production profits,how many machine hours would you recommend of each model? How many units of each model?
c. If there are 500 machine hours available per week (instead of only 420 machine hours per week),how many chairs of each model should Charlie's produce to maximize profits?

Charlie's Chairs Manufactures Two Models,Standard and Premium