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How should Sandhill allocate its production capacity

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Reference no: EM133056837

Question - Sandhill Industries manufactures chairs and tables that are in high demand by local office furniture stores. Following is information for each of these products:

 

Chairs

Tables

Selling price per item

$71.00

$88.00

Variable cost per item

53.00

69.00

Contribution margin per item

$18.00

$19.00

Machine hours per item

1.60

1.60

Sandhill has 968 machine hours available each month. The demand for chairs is 630 units per month and the demand for tables is 410 units per month. In order to maximize the company's total contribution margin, how should Sandhill allocate its production capacity between the chairs and tables?

a. 410 tables and 630 chairs

b. 605.00 chairs and 0 tables

c. 410 tables and 195.00 chairs

d. 605.00 tables and 0 chairs

Reference no: EM133056837

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