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helmer's rockers manufactures two models, standard and premium. weekly demand is estimated to be 100 units of the standard model and 70 units of the premium model. the following per unit data apply: standard premium contribution margin per unit $18 $20 number of machine-hours required 3 4 if there are 600 machine-hours available per week, how many rockers of each model should jim helmer produce to maximize profits?

Respuesta :

The demand for 100 units of the Standard model per week may be satisfied by Helmer's Rockers while using the remaining 196 hours to make 49 units of the Premium variant.

Data and Calculations:

                                                 Standard     Premium

Estimated weekly demand      100 units      70 units

Contribution margin per unit    $18              $20

Machine-hours required           3                    4

Total machine-hours required 300 hrs       280 hrs

Contribution per machine hour $6 ($18/3) $5 ($20/4)

Total Machine-hours available = 496

To maximize profit, produce   100 units      49 units

Machine-hours used                 300 hrs        196 hrs

By generating all 100 units of the Standard model's weekly demand and 49 units of the Premium model in the remaining 196 hours (496 - 300), Helmer's Rockers may optimize profitability.

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