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What is the optimal mix of sweatshirts

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Question: Comfy Fit Company manufactures two types of university sweatshirts, the Swoop and the Rufus, with unit contribution margins of $5 and $15, respectively. Regardless of type, each sweatshirt must be fed through a stitching machine to affix the appropriate university logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Swoop sweatshirt requires 6 minutes of machine time, and each Rufus sweatshirt requires 20 minutes of machine time.

Determining the Optimal Product Mix with One Constrained Resource and a Sales Constraint Refer to the information for Comfy Fit Company on the previous page. Assume that a maximum of 40,000 units of each sweatshirt can be sold.

Required: 1. What is the contribution margin per hour of machine time for each type of sweat shirt?

2. What is the optimal mix of sweatshirts?

3. What is the total contribution margin earned for the optimal mix?

Reference no: EM131697554

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