Heritage Watercraft makes reproductions of classic wooden boats.

Heritage Watercraft makes reproductions of classic wooden boats. The bottleneck in the production process is fitting wooden planks to build up the curved sections of the hull. This process requires the attention of the shop’s most experienced craftsman. A total of 1,800 hours is available per year in this bottleneck operation. Data concerning the company’s four products appear below:

No fixed costs could be avoided by modifying how many units are produced of any product or even by dropping any one of the products.


Required:

  1. Is there sufficient capacity in the bottleneck operation to satisfy demand for all products?
  2. What is the optimal production plan for the year?
  3. What would be the total contribution margin for the optimal production plan you have proposed?
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