36. Helmer’s Rockers manufactures two models, Standard and Premium. Weekly demand is estimated to be 100 units of the Standard Model and 70 units of the Premium Model. The following per unit data apply: Standard Premium Contribution margin per unit $18 $20 Number of machine-hours required 3 4 If there are 496 machine-hours available per week, how many rockers of each model should Jim Helmer produce to maximize profits?

Helmer's Rockers can maximize the company's profits to meet the 100 units of the Standard model's weekly demand, and use the remaining 196 hours to produce 49 units of the Premium model.

Data and Calculations:

Standard Premium

Estimated weekly demand 100 units 70 units

Contribution margin per unit $18 $20

Machine-hours required 3 4

Total machine-hours required 300 hrs 280 hrs

Contribution per machine hour $6 ($18/3) $5 ($20/4)

Total Machine-hours available = 496

To maximize profit, produce 100 units 49 units

Machine-hours used 300 hrs 196 hrs

Thus, Helmer's Rockers can maximize the profits by producing all the 100 units of the Standard model weekly demand, using the remaining 196 hours (496 - 300) to produce 49 units of the Premium model.

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