Question: Determining the Optimal Product Mix with One Constrained Resource Midlife Orthopedics Inc. provides two types of physical therapy service sessions, Injury Rehabilitation and Preventative

Determining the Optimal Product Mix with One Constrained Resource Midlife Orthopedics Inc.

Determining the Optimal Product Mix with One Constrained Resource Midlife Orthopedics Inc. provides two types of physical therapy service sessions, Injury Rehabilitation and Preventative Care, with unit contribution margins of $200 and $300, respectively. Regardless of type, each session requires the use of a certified physical therapist. Midlife Orthopedics has three therapists on staff who each work 2,000 hours per year. Each Injury Rehabilitation therapy session uses 15 minutes of therapist time, and each Preventative Care therapy session uses 45 minutes of therapist time. Assume that there are no other constraints. Required: 1. What is the contribution margin per hour of therapist time for each type of session (Injury Rehabilitation and Preventative Care)? When computing your answers, round contribution margin to two decimal places. Injury Rehabilitation Preventative Care Contribution Margin per hour per hour 2. What is the optimal mix of therapy sessions? If an amount is zero, enter "0". Injury Rehabilitation Preventative Care Optimal Mix units units 3. What is the total contribution margin earned for the optimal mix?

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