Question

Determining the Optimal Product Mix with One Constrained Resource and a Sales Constraint Comfy Fit Company manufactures two types of university sweatshirts, the Swoop and the Rufus, with unit contribution margins of $5 and $15, respectively. Regardless of type, each sweatshirt must be fed through a stitching machine to affix the appropriate university logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Swoop sweatshirt requires 6 minutes of machine time, and each Rufus sweatshirt requires 30 minutes of machine time. Assume that a maximum of 52,030 units of each sweatshirt 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 sweatshirt?

Contribution Margin:

Swoop $

Rufus $

2. What is the optimal mix of sweatshirt?

Optimal Mix:

Swoop units

Rufus units

3. What is the total contribution margin earned for the optimal mix? $

Answer 1