Portable Enterprises produces two lines of mobile homes:double-wide and single-wide. Unit cost and revenue data pertainingto each product are shown below:
- Double-wide Single-wide
- Sellingprice $70,000 $40,000
- Total variablecost 45,000 20,000
Each double-wide home requires 350 different labor hours and 125machine hours. Each single-wide home requires 175 direct laborhours and 150 machine hours. Demand for each line of homes farexceeds the company's total production capacity.
(a) If Portable%u2019s production capacity is constrained bylimited direct labor hours, which line of homes should it produce?
(b) If Portable%u2019s total production capacity is constrained bymachine hours, which line of homes should it produce?