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Identify the limiting factor

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Reference no: EM132565606

Gallery Corporation makes two products, footballs and baseballs. Additional information follows:

                                                 Footballs                        Baseballs

Demand (Units)                                 2,000                           3,000

Selling price per unit                            $30                               $8

Total variable costs per unit                     $ 12                           $ 4

Fixed costs                                          10,000                       5,250

Yards of leather per unit                           1.25                         0.25

Direct labor hours required per unit                0.75                          1.0

Assume that Gallery is able to purchase only 2,500 yards of leather and wishes to maximize its income. Total labor hours available for production is 4,600 hours.

Required:

Question a. Identify the limiting factor.

Question b. What will be the sales at which Gallety Corp will be at maximum profit by considering limiting factor

Reference no: EM132565606

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