Question

Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32. If it is assumed that Rough Stuff has 4,740 hours available on the cutting machine to service a minimum demand for each product of 3,200 units, how many of each product should be made?

Khaki Shorts: _______ pairs

Khaki Pants: _______ pairs

Answer 1

	Answer:
	Total Production Units
	Particulars	Khaki Shorts	Khaki Pants
	Minimum Demand	3200	3200
	Units produced after meeting minimum demand	-	6650
	Total Production Units	3200	9850

Working:1
Contribution Per Minute of Chief cutting Machine Area
Particulars	Khaki Shorts	Khaki Pants
Contribution Per Unit (A)	16	32
Minutes Per Pair (B)	15	24
Contribution Per Minute A/B	1.066666667	1.333333333
Rank	Second	First

Note: Since the Khaki pants Having more per minute contribution so after meeting Minimum demand the balance resources will be applied to produce Khaki Pants.

Calculation of Hours
Particulars	Khaki Shorts	Khaki Pants
Minutes Per Pair	15	24
Minimum Demand in Units	3200	3200
Hours Required to Complete Minimum Demand	800	1280
Hours Available	4740 Hours
Hours Required to Complete Minimum Demand	2080 Hours
Balance Hours	2660

Working: Balance Hours after meeting minimum demand	2660 Hours
Minutes Per Pair of Khaki Pants	24
Units of Khaki Pants Can be produce in balance Hours	6650

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