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Question - Cullumber 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
$86.00
$100.00
Variable cost per item
69.00
80.00
Contribution margin per item
$17.00
$20.00
Machine hours per item
1.60
Cullumber has 1088 machine hours available each month. The demand for chairs is 650 units per month and the demand for tables is 430 units per month. If Cullumber allocates its production capacity between the chairs and tables so that it maximizes the company's contribution margin, what will the total contribution margin be?
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