Question - Zing Inc. produces both soft and firm twin-size mattresses. Selected data related to each product is as follows:
|
|
Soft
|
Firm
|
|
Sales price per unit
|
$400
|
$500
|
|
Direct materials per unit
|
95
|
110
|
|
Direct labor per unit
|
35
|
55
|
|
Variable overhead per unit
|
15
|
20
|
|
Direct labor hourse per unit
|
30 minutes
|
45 minutes
|
Most of the stuffing process is done by hand. There arc a maximum of 2.400.000 direct labor minutes available each year.
Required:
A. If there is unlimited demand for both products, how many of each type of mattress should be produced in order to maximize profits?
B. lf the company believes that there is sufficient demand for up to 35,000 soft and 33,000 fine mattresses each year, how many of each type should be installed in order to maximize profits?