Tomball Co. manufactures two chair models, Standard and Premium. Weekly demand is estimated to be 150 units of the Standard Model, 100 units of the Premium Model, and 75 units of the Deluxe Model. Only 650 machine hours are available per week. The following per unit data apply: Standard Premium Deluxe Maximum demand (in units) 150 100 75 Current production (in units) 100 50 50 Contribution margin per unit $16 $24 $35 Number of machine hours required 4 5 Required: Please answer all the following questions, and show your works and computations to get full credits. 1. What is the contribution margin per machine hour for each model? b. What is the total contribution margin at the current level of production for each model? c. Given maximum capacity of 650 machine hours, how many machine hours would you recommend of each model to maximize weekly production profits? How many units of each model? d. If there is no limit for machine hours available per week (instead of only 650 machine hour per week), how many chairs of each model should Katy produce to maximize profits?

Tomball Co. manufactures two chair models, Standard and Premium. Weekly demand is estimated to be 150 units of the Standard Model, 100 units of the Premium Model, and 75 units of the Deluxe Model. Only 650 machine hours are available per week. The following per unit data apply: Standard Premium Deluxe Maximum demand (in units) 150 100 75 Current production (in units) 100 50 50 Contribution margin per unit $16 $24 $35 Number of machine hours required 4 5 Required: Please answer all the following questions, and show your works and computations to get full credits. 1. What is the contribution margin per machine hour for each model? b. What is the total contribution margin at the current level of production for each model? c. Given maximum capacity of 650 machine hours, how many machine hours would you recommend of each model to maximize weekly production profits? How many units of each model? d. If there is no limit for machine hours available per week (instead of only 650 machine hour per week), how many chairs of each model should Katy produce to maximize profits?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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