Use the following information to answer Questions

A manufacturer of skating equipment has met all its production requirements for the current month and has the opportunity to produce additional skates with its excess capacity. There is sufficient demand for the additional production of any model of the product line. The selling prices and unit costs of the four models of skates are as follows:

1. If the manufacturer has excess machine capacity and can add as much labour as needed, which model should be manufactured with the excess production capacity?a. Juniorb. Teenc. Internationald. Pro

2. If the manufacturer has excess machine capacity but limited labour hours, which model should be manufactured with the excess production capacity?a. Juniorb. Teenc. Internationald. Pro

3. If the manufacturer can add labour as needed but has limited machine capacity, which model should be manufactured with the excess production capacity?a. Juniorb. Teenc. Internationald. Pro

Transcribed Image Text:

Junior Teen International Pro Selling price $75 $100 $140 $250 Direct materials 25 30 40 55 Direct labour 20 30 50 110 Variable overhead* 10 15 25 55 Fixed overhead** 26 26 30 60