Question: Question 2 (8 points) Saved Business Product Decision Short Term Business Product Decision 8 points Suggested time: 14 minutes Airwalk Inc manufactures two types of

 Question 2 (8 points) Saved Business Product Decision Short Term Business

Question 2 (8 points) Saved Business Product Decision Short Term Business Product Decision 8 points Suggested time: 14 minutes Airwalk Inc manufactures two types of summer sandals: bamboo and leather. The costs and financial data for both lines of sandals are shown in the table below. Variable costs Contribution Margin Ratio Sales Price DL hours per sandal (pair) unit Costs and CM per unit Bamboo Leather $16 $32 0.6 0.5 $40 $64 0.5 hours 0.75 hours Airwalk sells all sandals that it produces. The Airwalk production area has capacity of 400 DL hours per month. A. Which type of sandal should be emphasized in Airwalk's product mix? Show your steps and reason for your answer. (6 points) B. Calculate Airwalk's total CM (contribution margin) in dollars, for one month, using your answer from Part A. (2 points)

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