Blossom Industries manufactures chairs and tables that are in high demand by local office furniture...
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Accounting
Blossom Industries manufactures chairs and tables that are in high demand by local office furniture stores. Following is information for each of these products:
Chairs
Tables
Selling price per item
$84.00
$100.00
Variable cost per item
70.00
85.00
Contribution margin per item
$14.00
$15.00
Machine hours per item
1.60
1.60
Blossom has 1072 machine hours available each month. The demand for chairs is 640 units per month and the demand for tables is 420 units per month. In order to maximize the companys total contribution margin, how should Blossom allocate its production capacity between the chairs and tables?
420 tables and 250.00 chairs
420 tables and 640 chairs
670.00 chairs and 0 tables
670.00 tables and 0 chairs
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