Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32. If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of 3,000 units, how much will profits increase if 106 more hours of machine time can be obtained?
Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32. If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of 3,000 units, how much will profits increase if 106 more hours of machine time can be obtained?
Chapter10: Financial Statements And Reports
Section: Chapter Questions
Problem 1.8C
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Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki
shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a
contribution margin per pair of pants of $32. If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of
3,000 units, how much will profits increase if 106 more hours of machine time can be obtained?
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