Reference no: EM132807377

A toymaker manufactures two types of wooden toys: Assorted Animals and Building Blocks. A set of Assorted Animals sells for $27 and uses $10 worth of raw materials. The variable labor and overhead costs of the Assorted Animals is $8 per set and fixed manufacturing overheads are $4. Building Block sets sells for $21 and uses $9 worth of raw materials. The variable labor and overhead costs of the Building Block sets is $7 and fixed manufacturing overheads are $5. The manufacture of Assorted Animals and Building Blocks requires two types of skilled labor: carpentry and finishing. Assorted Animal sets requires 2 hours of finishing labor and 1 hour of carpentry labor. Building Block sets requires 1 hour of finishing labor and 1 hour of carpentry labor. Each week, the toymaker can obtain all the needed raw material but only 100 finishing hours and 80 carpentry hours. Demand for Assorted Animals is unlimited, but at most 40 Building Block sets are bought each week.

a) Find the optimal production plan graphically.

b) Use solver in excel to verify your answer to a).

c) Provide the selling price/unit range for the Assorted Animals to be the favored product.

d) How much would 10 more hours of finishing labor be worth to the company? How much would 10 more carpentry hours be worth to the company?