How many of each type of mattress should be produced

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Question - Zing Inc. produces both soft and firm twin-size mattresses. Selected data related to each product is as follows:

 

Soft

Firm

Sales price per unit

$400

$500

Direct materials per unit

95

110

Direct labor per unit

35

55

Variable overhead per unit

15

20

Direct labor hourse per unit

30 minutes

45 minutes

Most of the stuffing process is done by hand. There arc a maximum of 2.400.000 direct labor minutes available each year.

Required:

A. If there is unlimited demand for both products, how many of each type of mattress should be produced in order to maximize profits?

B. lf the company believes that there is sufficient demand for up to 35,000 soft and 33,000 fine mattresses each year, how many of each type should be installed in order to maximize profits?

Reference no: EM131613624

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