Question

Determining the optimal Product Mix with One Constrained Resource Comfy Fit Company manufactures two types of university sweatshirts, the Swoop and the Rufus, with unit contribution margins of $4 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 there are no other constraints. Required: If required, round your answers to the nearest whole number. If an amount is zero, enter "0". 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

	Swoop	Rufus
Contribution Margin per unit	4	15
Number of Sweatshirts in one hour	10	2
Contribution Margin per hour	40	30
Since contribution margin per hour is higher for Swoop, all hours available will be used for producing Swoop
Optimal mix is as follows
Product	Units	Minutes per unit	Total Minutes
Swoop	70000	6	420000
Rufus	0	30	0
		Total	420000
3.Contribution margin earned	2,800,000

B Swoop 4 2 Contribution Margin per unit 3 Number of Sewatshirts in one hour 4. Contribution Margin per hour Rufus 15 =60/30 =C2*C3 =60/6 =B2*B3 5 6 Since contribution margin per hour is hig 7 Optimal mix is as follows 8 Product Units Minutes per unit Total Minutes 9 Swoop =D9/09 =D11 10 Rufus =D10/C10 =D11-09 11 Total =1000*7*60 12 3. Contribution margin earned =B9*B4+(B10*C4) 13 30