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What is optimal production level in number of square meter

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Question - Woodie Ltd makes two types of wood floors, regular and deluxe. The following data concerns the two products:

 

Regular

Deluxe

Sales price (per square metre)

$16

$25

Variable cost

$10

$15

Labour (hours per square metre)

0.15

0.20

Maximum sales (units per week)

30,000

8,000

There are 4,600 hours of labour time available for production. Fixed production costs total $600,000 and all selling costs are fixed.

Required - What is the optimal production level in number of square metres for each product?

Reference no: EM133177805

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