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Jimmyhighroller Jimmyhighroller
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A month ago
Mallory Manufacturing produces thermal tents and sleeping bags. The company's products are in high demand due to the quality and durability of the products. Mallory estimates it could sell 600 tents per month and 600 sleeping bags per month. Following is information for each of these products:

​​TentSleeping Bag
Selling price per item$68.00$43.00
Variable cost per item  49.50  29.00
Contribution margin per item$18.50$14.00
Machine hours per item1.10.8

Mallory has 800 machine hours available each month. In order to maximize the company's total contribution margin, how should Mallory allocate its production capacity between the tents and sleeping bags?

▸ 1,000 sleeping bags and 0 tents

▸ 600 tents and 175 sleeping bags

▸ 600 sleeping bags and 290 tents

▸ 727 tents and 0 sleeping bags
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
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chandlerdeanechandlerdeane
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A month ago
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600 sleeping bags and 290 tents

Tent = $18.50 ÷ 1.1 = $16.82; Sleeping Bag = $14.00 ÷ 0.8 = $17.50;
600 Sleeping Bags × 0.8 = 480 hours; 800 - 480 = 320 hours remaining to make tents;
320 ÷ 1.1 = 290 Tents
1

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Jimmyhighroller Author
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A month ago
Good timing, thanks!
courtneyrmcd
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Yesterday
You make an excellent tutor!
rileyjones420
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2 hours ago
Correct Slight Smile TY
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