Question 3: Product mix with constraint resources (chapter 10)

Master bed Ltd manufactures three types of mattresses- traditional foam mattresses, latex foam mattresses and memory foam mattresses. The selling price, variable costs, and contribution margin for one mattress of each type

are given in the below table:

Mattress type Traditional foam Latex foam Memory foam Selling price $275 $350 $450 Variable costs: Direct material (foam) $48 $36 $60 Direct labour $30 $40 $50 Other variable costs $79 $149 $169 Contribution margin $118 $125 $171