Determining the Optimal Product Mix with One Constrained Resource and a Sales Constraint Casual Essentials, Inc. manufactures two types of team shirts, the Homerun and the Goalpost, with unit contribution margins of $5 and $15, respectively. Regardless of type, each team shirts must be fed through a stitching machine to affix the appropriate team logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Homerun shirt requires 6 minutes of machine time, and each Goalpost shirt requires 30 minutes of machine time. Assume that a maximum of 48,990 units of each team shirts can be sold. Required: If required, round your answers to the nearest whole number. 1. What is the contribution margin per hour of machine time for each type of team shirts? Contribution Margin Homerun Goalpost 2. What is the optimal mix of team shirts? Optimal Mix Homerun units Goalpost units 3. What is the total contribution margin earned for the optimal mix?
Determining the Optimal Product Mix with One Constrained Resource and a Sales Constraint Casual Essentials, Inc. manufactures two types of team shirts, the Homerun and the Goalpost, with unit contribution margins of $5 and $15, respectively. Regardless of type, each team shirts must be fed through a stitching machine to affix the appropriate team logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Homerun shirt requires 6 minutes of machine time, and each Goalpost shirt requires 30 minutes of machine time. Assume that a maximum of 48,990 units of each team shirts can be sold. Required: If required, round your answers to the nearest whole number. 1. What is the contribution margin per hour of machine time for each type of team shirts? Contribution Margin Homerun Goalpost 2. What is the optimal mix of team shirts? Optimal Mix Homerun units Goalpost units 3. What is the total contribution margin earned for the optimal mix?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Determining the Optimal Product Mix with One Constrained Resource and a Sales Constraint
Casual Essentials, Inc. manufactures two types of team shirts, the Homerun and the Goalpost, with unit contribution margins of $5
and $15, respectively. Regardless of type, each team shirts must be fed through a stitching machine to affix the appropriate team
logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Homerun shirt requires 6
minutes of machine time, and each Goalpost shirt requires 30 minutes of machine time.
Assume that a maximum of 48,990 units of each team shirts can be sold.
Required:
If required, round your answers to the nearest whole number.
1. What is the contribution margin per hour of machine time for each type of team shirts?
Contribution Margin
Homerun
Goalpost
2. What is the optimal mix of team shirts?
Optimal Mix
Homerun
units
Goalpost
units
3. What is the total contribution margin earned for the optimal mix?
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