Question
In: Accounting
Cindy’s Umbrellas makes two types of patio umbrellas, regular and deluxe. Suppose there is unlimited customer...
Cindy’s Umbrellas makes two types of patio umbrellas, regular and deluxe. Suppose there is unlimited customer demand for each product. The selling prices and variable costs of each product are listed below.
Regular Deluxe
Selling price per unit $40 $110
Variable cost per unit 20 44
Contribution margin per unit $20 $66
Required machine hours/unit 0.4 2.0
Required labor hours/unit 2.0 6.0
Cindy has only 160,000 machine hours available per year
Cindy has only 600,000 direct labor hours available per year
a. What are Cindy’s objective function and constraint inequalities?
b. Graph and label the constraints, denoting the feasible production set on your graph.
c. What is the value of the objective function at the intersection point of the constraints, and the two intercepts? What is the optimal production mix?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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