Answered: Desks Chairs Selling price per unit.…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EA: A company estimates its manufacturing overhead will be $750,000 for the next year. What is the...

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Santana Rey has found that Business Solutions’s line of computer desks and chairs has become popular, and she is finding it hard to keep up with demand. She knows that she cannot fill all of her orders for both items, so she decides she must determine the optimal sales mix given the resources she has available. Information about the desks and chairs follows. Santana has determined that she only has 1,015 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available.

Desks
Chairs
Selling price per unit.
$1,125
$375
Variable costs per unit .
500
$ 625
200
$175
4 hours
Contribution margin per unit
Direct labor hours per unit
Expected demand for next quarter ..
5 hours
175 desks
50 chairs

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