Eye Symmetry’s founder Max Stewart makes surfboards in different lengths. He must decide on the best sales mix. Assume Max has a capacity of 240 hours of direct labor time available each month, and he makes two types of boards: Short and Long. Information on these products follows.

Required

1. Assume the markets for both types of surfboards are unlimited. How many Short boards and how many Long boards should Max make each month?
2. How much total contribution margin does the sales mix from part 1 produce each month?
3. Assume the market for Short boards is limited to 20 per month, with no market limit for Long boards. How many Short boards and how many Long boards should Max make each month? How much total contribution margin does this mix produce each month?

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Surfboards Short Long Selling price per unit.... $700 $900 ..... Variable costs per unit ... 400 500 Direct labor hours per unit 8 hours 16 hours ...