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Question - Brandy Wood Company makes a regular and a deluxe grade of wood floors. Regular grade is sold at $17 per square yard, and the deluxe grade is sold at $34 per square yard. The variable cost of making the regular grade is $9 per square yard. It costs an extra $8 per square yard to make the deluxe grade. lt takes 20 labor hours to make 100 square yards of the regular grade, and 25 labor hours to make 100 square yards of the deluxe grade. There are 4,500 hours of labor time available for production each week. The maximum weekly sales for the regular and the deluxe model are 40,000 and 5,000 square yards, respectively. Fixed production costs total $450,000 per year. All selling costs are fixed. What is the optimal production level in number of square yards for each product?
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