What is the total contribution margin at the current level of production for each model?

What is the contribution margin per machine hour for each model?

Given maximum capacity of 2,000 machine hours, how many machine hours would you recommend of each model to maximize weekly production profits? How many units of each model?

If there is no limit for machine hours available per week (instead of only 2,000 machine hour per week), how many chairs of each model should the company produce to maximize profits?

 

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Woodland Co. manufactures three models, Basic, Delux, and Super. Estimated monthly demand and production volume for each model is provided in the following table. Only 2,000 machine hours are available per month. The following per unit data apply: Maximum demand (in units) Current production (in units) Contribution margin per unit Number of machine hours required Basic 500 400 $70 2 Premium 150 120 $100 5 Supreme 100 100 $120 8 Woodland Co. manufactures three models, Basic, Delux, and Super. Estimated monthly demand and production volume for each model is provided in the following table. Only 2,000 machine hours are available per month. The following per unit data apply: Maximum demand (in units) Current production (in units) Contribution margin per unit Number of machine hours required Basic 500 400 $70 2 Premium 150 120 $100 5 Supreme 100 100 $120 8

Answer rating: 100% (QA)

Here are the calculations Total contribution margin at current production Basic 120 units 70 ... View the full answer