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Slavin Corporation manufactures two products, Alpha and Delta. Each product requires time on a single machine. The machine has a monthly capacity of 500 hours. Total market demand for the two products is limited to 170 units (each) monthly. Slavin is currently producing 110 Alphas and 110 Deltas each month. Cost and machine-usage data for the two products are shown in the following table, which Slavin managers use for planning purposes.

	Alpha	Delta	Total
Price	$	120		$	150
Less variable costs per unit
Material		19			34
Labor		25			37
Overhead		17.5			16
Contribution margin per unit	$	58.5		$	63
Fixed costs
Manufacturing							$	7,800
Marketing and administrative							$	4,800
							$	12,600
Machine hours per unit		2.0			2.5
Machine hours used								495
Machine hours available								500
Quantity produced		110			110
Maximum demand		170			170
Profit	$	765

Required:

a.What is the optimal production schedule for Slavin? In other words, how many Alphas and Deltas should the company produce each month to maximize monthly profit?

b.If Slavin produces at the level found in requirement (a), how much will monthly profit increase over the current production schedule?

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