Outback Seats makes and sells two types of camping chairs, Echidna and Kangaroo. Fixed costs per month are $12,000. Selling prices and variable costs per unit are Echidna Kangaroo Unit Selling price $100 $80 Unit variable cost $40 $50 The same machine is used to manufacture the Echidna and Kangaroo models. Machine capacity is 800 hours per month. The Echidna takes 0.10 machine hours per unit while the Kangaroo requires 0.25 machine hours per unit. 

a) What is the optimal production schedule to maximize monthly profits (to the nearest whole number)  

b) In addition to machine time, 3000 hours of skilled labor is required per month. The Echidna model requires 0.60 labor hours per unit and the Kangaroo model requires 0.75 labor hours per unit. Taking into account the machine and labor constraints, what is the optimum product mix?  

c) The total cost function increases over the relevant range of activity. Why does the marginal cost function exhibit its complex behavior?  

d) Despite the costs involved, measuring environmental and social impacts (sustainability) can provide useful information to assist firms in achieving a competitive advantage. Explain?

Answer rating: 100% (QA)

a To maximise monthly production mix profits Rank 1 can be given to echi... View the full answer