Limited Resources: Tyler\'s Rockers manufactures two models, Standard and Premiu

Question

Limited Resources: Tyler'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 $18 Premium $20 Contribution margin per unit Number of machine-hours required 4 Required: a. The contribution margin per machine-hour at the constraint for standard and premium is: b. If there are 496 machine-hours available per week, how many rockers of each model should Tyler produce to maximize profits? c. How much in profits will Tyler's Rockers earn if they follow the plan in b?

Explanation / Answer

Standard Premium Contribution margin per unit 18 20 No. of machine hours 3 4 Contribution margin per machine hour 6 5 b Standard = 100 Premium = (496-300)/4= 49 c Profits = (100*18)+(49*20)= 2780

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