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Determine the optimal sales mix

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Reference no: EM13508744

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 $ 1,454.25
$ 498.00
Variable costs per unit
560.00

150.00



Contribution margin per unit $ 894.25
$ 348.00



Direct labor hours per unit
7 hours
6 hours
Expected demand for next quarter
171 desks
47 chairs

Santana has determined that she only has 1,413 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. (Input all amounts as positive values. Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response).

 


 Desks Chairs Total
Sales $ $ $
Variable costs



Contribution margin $ $ $

PLEASE HAVE ANSWERS DISPLAYED AS IF THEY ARE BEING PLACED IN THE BOX

 

Reference no: EM13508744

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